US stocks claw back lost ground as China stabilizes currency
NEW YORK (AP) — Stocks bounced back in early trading Tuesday on Wall Street, a day after their worst loss of the year, as China eased some of the pressure in its trade war with the U.S. by stabilizing its currency.
Technology stocks led the market higher in a reversal of Monday’s slump, when they bore the brunt of the market sell-off that pushed U.S. indexes 3% lower. That plunge was triggered when China allowed its currency to depreciate against the dollar to its lowest level in 11 years.
Apple rose 2% and Microsoft rose 1.6%. Both companies get significant revenue from China and are highly sensitive to swings in the ongoing trade dispute.
Investors were more willing to take on risk. They shed safe-play holdings like utility stocks and U.S. government bonds. The yield on the 10-year Treasury rose to 1.76% from 1.73% a day earlier.
Industrial stocks rose. Aircraft components maker TransDigm did some of the heavy lifting with a 18% surge after giving investors a raised profit forecast and solid quarterly earnings.
Solid earnings results helped lift other sectors. Animal health company Zoetis rose 6.5% and led health care stocks higher.
Energy stocks were the biggest losers in the early going.
KEEPING SCORE: The S&P 500 index rose 0.4% as of 10:15 a.m. Eastern time. The Dow Jones Industrial Average rose 66 points, or 0.3%, to 25,787. The Nasdaq composite rose 0.6%.
OVERSEAS: European indexes edged mostly higher. Asian indexes were broadly lower. The Shanghai composite index fell 1.6% and South Korea’s Kospi fell 1.5%.
TOO BLAND: International Flavors & Fragrance fell 10.5% after the company trimmed its forecast following a disappointing earnings report. Profit and revenue came in below Wall Street forecasts during the second quarter. Its key food ingredients unit recorded a sales decline.
DRIVING GROWTH: Take-Two Interactive Software rose 7.9% on a surge in sales of “Grand Theft Auto” and other popular video games. The company, which also makes the “Red Dead Redemption” games, beat Wall Street’s fiscal first quarter profit forecasts and gave investors a surprisingly good sales forecast for the current quarter.
ABOVE WATER: SeaWorld Entertainment jumped 4.3% after reporting surprisingly good profit growth as more people went to its theme parks and spent more money on food and merchandise. The company, which is best known for its namesake parks, also cut costs during the quarter.