US close: Wall Street manages green finish as Trump's tweets concern markets
Wall Street finished well into the green on Monday, helped by upbeat readings on the country's services sector albeit amid lingering concerns about the potential for increased trade frictions between the US and some of its main trading partners.
Dow Jones I.A.
37,986.40
04:30 15/10/20
Nasdaq 100
17,037.65
12:15 19/04/24
The Dow Jones Industrial Average was ahead 1.37% at 24,874.76 at the closing bell, with the S&P 500 following with a 1.1% rise to 2,720.94 and the Nasdaq 100 adding 1.03% to 6,881.28.
On Friday, stocks ended the session mixed, amid news that Trump would impose a 25% tariff on steel imports and a 10% tariff on aluminium.
Helping to steady sentiment, the ISM's closely-followed services sector purchasing managers' index slipped from a reading of 59.9 for January to 59.5 in February, beating consensus expectations for 59.0.
As expected, the separate services sector PMI compiled by IHS Markit rose to 55.9 in February from 53.3 for the month before.
On Saturday Donald Trump fanned the flames of the prospect of a trade war with Europe, using his favourite method of information dissemination, Twitter.
"If the EU wants to further increase their already massive tariffs and barriers on US companies doing business there, we will simply apply a tax on their cars which freely pour into the US,” he wrote.
“They make it impossible for our cars (and more) to sell there. Big trade imbalance!”
The US president followed that up early on Monday, tweeting that tariffs against Canada and Mexico would only be cancelled if a "new and fair" North American Free Trade deal was signed.
“With the US president threatening tariffs on car imports should the EU retaliate, there is a real possibility that a trade war could unfold which doesn't work to anyone's benefit,” noted Craig Erlam, senior market analyst at Oanda.
“The prospect of this rattled markets on Friday but this didn’t last long and US equities quickly bounced back, with the S&P 500 ending the day half a percentage point higher.
“European stocks have been playing catch up at the start of the week, although automakers continue to struggle after Trump's threats.”
Market participants also spent the session keeping an eye on Italy, with the Eurosceptic and populist Five Star Movement and the anti-immigrant League both claiming a moral victory at least after voters returned a hung parliament on Sunday.
In corporate news, shares in Sparton Corporation took a 27.15% beating after its takeover by London-listed Ultra Electronics was blocked on antitrust grounds.
It was a much cheerier picture for Bermuda-based insurer XL Group, however, with shares up a whopping 29.15% after it agreed to be bought by French insurance giant AXA for $15.3bn.
Clearside Biomedical rocketed 32.1% after announcing positive top-line results in a late-stage trial of a macular edema treatment.