US stocks join global rally; Nasdaq +1.4%

US stocks join global rally; Nasdaq +1.4%

Wall Street NYSE
Signage of Wall Street outside the New York Stock Exchange.

NEW YORK: Wall Street stocks jumped on Tuesday (Aug 22), with investors taking advantage of a recent pullback in equities as worries about US political stability and tensions with North Korea receded.

All three major US indices won solid gains, mirroring advances in overseas markets as a relatively placid newsflow replaced the fever pitch of headlines surrounding President Donald Trump in recent weeks.

"People seem to be a little less worried about political uncertainty and there's less chance of war with North Korea," said Nathan Thooft, senior managing director of Manulife Asset Management. "The broader fundamentals still look pretty good."

The Dow Jones Industrial Average rose 196.14 points (0.90 per cent) to 21,899.89, the biggest gain since April.

The broad-based S&P 500 climbed 24.14 points (0.99 per cent) to 2,452.51, while the tech-rich Nasdaq Composite Index surged 84.35 points (1.36 per cent) to 6,297.48.

The gains were a big departure from the investor caution of the last couple of weeks, which have been dominated first by US-North Korean tensions and then by widespread criticism of Trump's response to a white supremacist rally in the state of Virginia that became violent.

But these issues have become less visible thus far this week, allowing investors to focus on the improving earnings outlook and solid economic activity.

Dow member Chevron rose 0.6 per cent after the Wall Street Journal reported that chief executive John Watson plans to announce he will step down next month. The front-runner to replace him is executive vice president Mike Wirth, but the plan has not been finalised and could still change, said the newspaper, citing unnamed sources.

Monsanto rose 0.3 per cent after the European Commission announced it would open an in-depth investigation into the agricultural giant's proposed US$66 billion takeover by Germany's Bayer due to antitrust concerns. Monsanto said it will work with regulators and that it still hopes to close the transaction by the end of 2017.

Source: AFP/de