Bargain hunters put aside trade fears to buy hardest-hit stocks on Wall Street

Investors put aside their worst fears from the US-China trade dispute to chase battered blue-chip stocks such as Boeing and Caterpillar.

The Dow Jones Industrial Average advanced 239.33 points, or 1.0% to 24,503.77 after swinging 741 points in Wednesday’s highly volatile session.

The S&P 500 gained 0.7% to 2662.82 and the Nasdaq Composite rose 0.5% to 7076.55, reflecting fresh demand for tech stocks.

Boeing rose 1.9% and Caterpillar gained 1.5%.

Hard-hit Amazon.com rose 2.4% to nearly recoup the online retailer’s losses for the week. This stock has been struggling since President Donald Trump suggested it doesn’t pay its fair share of taxes.

Shares of Facebook also rose, adding 1.7%. The company admitted it made a “huge mistake” in not focusing more on potential abuse of users’ personal information.

This came amid news it expanded the pool of potential users whose data was improperly shared with a third-party consulting firm tied to the 2016 Trump campaign to 87 million.

Shares of chemicals and mining companies, some of which have stumbled since the steel and aluminium tariffs were first unveiled, were also in demand.

The Dow again traded in a broad range, rising as much as 358 points in morning trading before giving up most of those gains. It then resumed its climb before easing toward the close.

'Tug of war' market
“The stock market is in a bit of a tug of war,” says Allen Bond, portfolio manager of the Jensen Quality Growth Fund. “There are concerns about tariffs, trade wars and the potential for higher inflation—and the [Federal Reserve’s] response to that.”

Meanwhile, the trade negotiations between the US and China will be closely watched, with some cautioning that any indications that talks are faltering or of additional sanctions would put the markets at risk of another pullback.

“A breakdown in trade negotiations and policy missteps could lead to a full-blown trade war that would damage global business and consumer confidence, investment prospects, and growth,” says Terry Chan, credit analyst at S&P Global Ratings.

US government bond prices declined as global stocks rallied, lifted by bets that that negotiations would soften the blow of announced trade tariffs.

The yield on the benchmark 10-year Treasury note settled at 2.830%, up from 2.788% on Wednesday.

Oil prices edged higher as fears that trade restrictions would crimp global economic growth took a back seat to declining US inventories.

US crude futures rose 0.3% to $US63.54 a barrel in New York. Brent, the global benchmark, rose 0.5% to $US68.33.

Investors are now turning their attention to the next round of quarterly earnings reports.

Companies in the S&P 500 are projected to boost first quarter earnings by 17% from the year-earlier period.

The Stoxx Europe 600 index rose 2.4%, reflecting a strong rebound in that market. France’s CAC 40 gained 2.6%, Germany’s DAX surged 2.9% and the UK’s FTSE 100 advanced 2.35%.