US open: Dow moves to within 1% of all-time high
Wall Street trading started off with some mixed returns on Wednesday as the Dow moved to within 1% of an all-time high, despite trade tensions between the US and China that were still weighing heavily on sentiment.
At 1530 BST, the Dow Jones Industrial Average was up 0.48% to 26,378.88 and the S&P 500 was ahead 0.10% to 2,907.17. The Nasdaq Composite meanwhile was 0.15% softer at 7,944.36.
The Dow Jones jumped more than 100 points at the bell, as the broader market appeared to be shaking-off worries about the Sino-US trade conflict to an extent.
The blue-chip benchmark was less than 1% short of its all-time high of 26,616.71.
SpreadEx analyst Connor Campbell said: "The Dow Jones jumped around 130 points to tickle 26400, a near 8 month high. It’s the 2nd session in a row that the Dow has ignored the developments in the US-China trade war, choosing instead to handpick the elements it was willing to focus on."
China retaliated against Trump's 10% levy on another $200bn of Chinese imports - which could rise to 25% in the New Year - with new trade tariffs on $60bn of US goods. Trump then responded by repeating his threat to raise tariffs on another $267bn of Chinese imports.
Oanda analyst Craig Erlam said: "The latest tit-for-tat between Washington and Beijing has been on the cards for some time and while investors would have preferred to avoid the need for them, they were prepared and it was well priced in. In fact, the US tariffs were probably towards the lower end of expectations so the announcement didn't really carry the same shock factor that previous announcements or reports have.
"What may have a greater impact is Donald Trump following through quickly on phase three, as he has indicated he would which would dramatically ramp up the intensity and pace of the trade war between the two countries and could lead to more undesirable outcomes."
However, there was some good news on the geopolitical front as North Korea said it would close a key missile test facility and potentially destroy its primary nuclear complex if the US agreed to corresponding measures.
After two days of talks, North Korean leader Kim Jong Un and South Korean President Moon Jae-in agreed to a number of non-military announcements, including plans to create rail and road links between the two Koreas within the next year and to submit a joint bid for the 2032 Summer Olympics.
In corporate news, Tilray rocketed 21.55% in early trade following stellar gains on Tuesday after the US Drug Enforcement Administration approved the company's request to export medical marijuana.
Electric car maker Tesla was up 0.80% despite a report circulating that the company was being investigated by the US justice department over statements that it and founder Elon Musk made last month about going private.
Elsewhere, Red Hat was down 0.67% and Herman Miller was up 0.27% ahead of their earnings reports later in the day.
On the data front, homebuilding in the States picked-up substantially last month, but a key forward-looking indicator fell short of analysts' forecasts.
According to the Department of Commerce, US housing starts shot up by 9.2% month-on-month in August to reach an annualised clip of 1.282m, led by activity in the West and Midwest.
That was well ahead of the 1.225m pace which economists had pencilled-in.
Nevertheless, starts for single-family homes were up by a tamer 1.9% month-on-month to 876,000.
Housing permits on the other hand, which tend to lead the data on starts, declined by 5.7% versus July to reach 1.229m (consensus: 1.30m).
"We expected a decline, given the softening in new home sales, but the 6.1% drop in single-family starts was bigger than we forecast and it now suggests that single-family permits are on course to drop to a 12-month low in September, even without the hit from Hurricane Florence," said Ian Shepherdson at Pantheon Macroeconomics.
Elsewhere, America's current account deficit with the rest of the world narrowed more quickly than expected during the second quarter.
Over the three months to June, the shortfall declined from -$121.7bn in the first quarter to -$101.5bn for the three months to June, according to the Bureau of Economic Analysis.
The main driver behind the improvement was a $17.6bn reduction in America's deficit on its foreign trade in goods and a $2.5bn increase in its surplus on services.