A deepening trade dispute between the United States and China weighed on global stocks and bond yields on Thursday, but a rise in Apple shares took its valuation above a record $1-trillion and helped lift major U.S. indexes into positive territory.
In midday trading, Apple Inc became the first publicly traded company with a market capitalization exceeding $1-trillion. That led a rebound in technology stocks that helped key U.S. indexes pare earlier losses to turn positive.
“It’s certainly a tremendous achievement to create a company with a $1 trillion market cap,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. Still, he said, “it’s just a number.”
The tech company’s stock jumped more than 3.3 per cent to as high as $208.38, bringing its gain to about 9 per cent since Tuesday when it reported quarterly results that beat expectations and said it bought back $20-billion of its own shares.
On Wall Street, the Dow Jones Industrial Average fell 7.33 points, or 0.03 per cent, to 25,326.49, the S&P 500 gained 13.91 points, or 0.49 per cent, to 2,827.27 and the Nasdaq Composite added 95.40 points, or 1.24 per cent, to 7,802.69.
The Nasdaq, Dow and benchmark S&P indexes had opened lower, but began to turn positive as the advance in Apple shares helped take the focus away from the trade dispute.
In Toronto, the S&P/TSX composite index unofficially closed up 32.39 points, or 0.20 per cent, at 16,409.16.
Information technology stocks gained 2.5 per cent, led by a 5.9-per-cent jump in shares of Shopify Inc.
Blackberry Ltd. rose 3.1 per cent, while CGI Group Inc. finished up 2 per cent.
The heavyweight energy sector lost 0.6 per cent despite a rise in oil prices. Canadian Natural Resources Ltd. fell 2 per cent and Suncor Energy Inc. was down 1.2 per cent
Still, concerns remained over the U.S.-China trade spat, which intensified on Wednesday after U.S. President Donald Trump raised pressure on China by proposing a higher 25-per-cent tariff on $200 billion worth of Chinese imports.
China on Thursday urged the United States to “calm down,” but market participants remained unnerved.
MSCI’s gauge of stocks across the globe shed 0.75 per cent, while the pan-European FTSEurofirst 300 index lost 0.85 per cent.
Germany’s blue-chip index DAX, which is seen as a trade war proxy, fell 1.5 per cent while the broader pan-European STOXX 600 was down about 0.8 per cent.
MSCI’s broadest index of Asia-Pacific shares outside Japan closed 1.6 per cent down, dragged lower by a 1.8-per-cent fall in Chinese H-shares.
Benchmark U.S. government bond yields dipped as the market sought safe-haven debt in Treasuries amid the trade dispute.
“We’re in risk-off mode after the back and forth between China and the U.S. on tariffs,” said Priya Misra, head of global rates strategy at TD Securities in New York. “You’re already seeing (trade tension) affect investment decisions globally, so it is a growth concern.”
Euro zone government bond yields dipped, and borrowing costs in Germany and France pulled back from seven-week highs.
On Wednesday, the Federal Reserve kept interest rates unchanged as expected, characterizing the U.S. economy as strong and staying on track to increase borrowing costs in September and likely again in December.
Gold prices inched downward after Fed’s upbeat assessment of the economy to the lowest price in more than a year as the dollar, which typically has an inverse relationship with gold, rose.
Spot gold dropped 0.6 per cent to $1,208.60 an ounce. U.S. gold futures fell 0.82 per cent to $1,217.50 an ounce.
The dollar index rose 0.52 per cent, with the euro down 0.57 per cent to $1.1592.
Oil prices strengthened after an industry report suggested U.S. crude stockpiles would soon begin to decline again after a surprise rise in the latest week.
Traders said prices rallied when industry information provider Genscape reported crude inventories at Cushing, Oklahoma, delivery hub for U.S. crude, dropped 1.1 million barrels since Friday, July 27.
Brent crude futures settled up $1.06, or 1.5 per cent at $73.45 a barrel. U.S. crude rose $1.30, or 1.9 per cent, to $68.96 a barrel.
Reuters