Markets

U.S. Stocks Posting Modest Gains Amid Optimism About Stimulus, Trade Talks

(RTTNews) - Stocks have moved modestly higher in morning trading on Friday after closing mixed for two consecutive sessions. The major averages have all moved to the upside, although buying interest has remained somewhat subdued.

Currently, the major averages are holding on to slim gains. The Dow is up 78.78 points or 0.3 percent at 27,173.57, the Nasdaq is up 9.60 points or 0.1 percent at 8,192.48 and the S&P 500 is up 7.63 points or 0.3 percent at 3,014.42.

The modest strength on Wall Street may reflect optimism that stimulus packages by central banks around the world will help bolster slowing economic growth.

Traders also remain hopeful about an eventual end to the U.S.-China trade war, with deputy U.S. and Chinese trade negotiators resuming talks for the first time in almost two months on Thursday.

The deputy-level talks this week are expected to help pave the way for more productive high-level U.S.-China trade talks next month.

On the trade front, a report from Politico says the Trump administration is exempting hundreds of Chinese products from tariffs imposed last year.

The report, confirmed by CNBC, says the list of exemptions includes products such as Christmas tree lights, plastic straws, and pet supplies.

Politico said the exemptions are less about placating China than they are an effort to provide relief to some U.S. companies who say they have been harmed by the tariffs.

Meanwhile, on a quiet day on the U.S. economic front, St. Louis Federal Reserve President James Bullard released a statement explaining his preference for cutting interest rates by 50 basis points at the Fed meeting earlier this week.

Bullard cited signs that U.S. economic growth is expected to slow in the near horizon as well as continued indications of low inflation.

"In light of these developments, I believe that lowering the target range for the federal funds rate by 50 basis points at this time would provide insurance against further declines in expected inflation and a slowing economy subject to elevated downside risks," Bullard wrote.

He added, "It is prudent risk management, in my view, to cut the policy rate aggressively now and then later increase it should the downside risks not materialize."

Pharmaceutical stocks have shown a strong move to the upside in morning trading, driving the NYSE Arca Pharmaceutical Index up by 1.4 percent to its best intraday level in nearly two months.

Networking and healthcare stocks are also seeing some strength on the day, while most of the other major sectors are showing more modest moves.

In overseas trading, most stock markets across the Asia-Pacific region moved modestly higher during trading on Friday. Japan's Nikkei 225 Index and China's Shanghai Composite Index both edged up by 0.2 percent.

The major European markets have also shown modest moves to the upside on the day. While the French CAC 40 Index has risen by 0.5 percent, the U.K.'s FTSE 100 Index and the German DAX Index are both up by 0.1 percent.

In the bond market, treasuries have bounced back near the unchanged line after seeing initial weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 1.772 percent.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.