Wall Street corrects a margin of the biggest falls in 2019; Dow ends over 300 points higher
|- DJIA, ended around 312 points higher, up 1.2%, near 26,030.
- The S&P 500 SPX added around 37 points, or 1.3%, to close near 2,882.
- The Nasdaq Composite COMP also rose around 107 points to end near 7,833, for a gain of 1.4%.
US stocks ended higher with the benchmarks printing in the green in spite of the trade war risks, correcting a portion of the rout and the biggest decline since the turn of the year. Bulls stepped in again, expecting that there will eventually be a deal secured between the US and China, enthused by the idea of a meeting next month and shrugging off an imminent threat to global growth as signs of currency wars developed at the start of the week.
Chinese stated that they will essentially do what they can to prevent the Yuan from falling further
The escalation in trade tensions as the Yuan depreciated through the key psychological level of 7 to the USD, and the US labelled China a currency manipulator, subsided on Tuesday as the Chinese stated that they will essentially do what they can to prevent the Yuan from falling further. Consequently, the Dow Jones Industrial Average, DJIA, ended around 312 points higher, up 1.2%, near 26,030, while the S&P 500 SPX added around 37 points, or 1.3%, to close near 2,882. The Nasdaq Composite COMP also rose around 107 points to end near 7,833, for a gain of 1.4%.
"US markets partially recovered some recent losses after China moved to stabilise its currency," analysts at ANZ Bank explained.
"The PBoC’s stronger-than-expected fixing of the yuan yesterday, and reiteration that it won’t seek to competitively depreciate, helped to stabilise markets. The US expects China to visit in September for further trade talks, news which also allayed fears of a further escalation in the trade war. A bit better sentiment in markets supported a partial recovery in US equities."
DJIA levels
The DJIA index found support on the 200-DMA and claimed back the 26000s. However, bears can look to the June swing lows down at 24680 on further declines. The 200-DMA remains a line in the sand and on the upside, an extension of the correction opens the 78.6% Fibo target of 26103.
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