Wall Street moves sharply higher on better risk appetite
|- Nasdaq Composite put on around 107 points to end the day near 8,003, a gain of 1.4%.
- The S&P 500 SPX added 35 points, or 1.2% to end near 2,924.
- DJIA, +0.96% rose around 250 points, or 1%, to end near 26,136.
US Stocks ended higher on a positive risk mood on Monday. The markets cheered the prospects of additional stimulus from global policymakers, shaking off negative trade war headlines as Trump says he is not ready to make a trade deal with China. However, there had been some relief in Trump delaying Huawei restrictions for the sake of US telecoms.
Trump announced that restrictions on Huawei operations would be delayed 90 days, giving US telecom companies more time to untangle their systems from reliance on the company’s technology. This, however, followed weekend comments from Trump over his twitter facility saying it would be difficult to reach a trade deal if China “did something violent” in Hong Kong.
Instead, the focus was on Germany that was ready to act with a stimulus plan and White House officials are considering a payroll tax break to stimulate the economy. Also, the People's Bank of China is to overhaul its interest-rate mechanism, paving the way to lower borrowing costs for businesses.
Benchmarks
Consequently, the Dow Jones Industrial Average DJIA, +0.96% rose around 250 points, or 1%, to end near 26,136, according to preliminary figures, while the S&P 500 SPX added 35 points, or 1.2%, to close near 2,924. The Nasdaq Composite put on around 107 points to end the day near 8,003, a gain of 1.4%.
DJIA levels
The DJIA recovered from the August lows last week and found a base back above the 200-day moving average. Bulls have claimed back the 26000s and target a break of the 20 and 50 DMAs. On a downside correction, bears can target the 50% mean reversion level of the late Dec 2018 swing lows and mid-July swing market highs down in the 24500s.
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