Markets Cheer Cooled Trade Tensions…..

U.S. equities finished higher, as the intensified trade tensions between the U.S. and China that slammed stocks on Friday after the two countries traded barbs over tariffs appeared to have cooled a bit after President Donald Trump offered comments at the G-7 summit in France suggesting China wants to resume talks. Treasury yields were lower and the U.S. dollar recovered some of late last week’s drop, while crude oil prices were lower and gold was able to modestly add to a recent rally. News on the economic front was mostly upbeat, as July durable goods orders data came in mixed and regional manufacturing activity unexpectedly expanded.

The Dow Jones Industrial Average (DJIA) rose 270 points (1.1%) to 25,899, the S&P 500 Index added 31 points (1.1%) to 2,878 and the NASDAQ Composite gained 102 points (1.3%) to 7,854. In light volume, 706 million shares were traded on the NYSE and 1.7 billion shares changed hands on the NASDAQ. WTI crude oil moved $0.53 lower to $53.64 per barrel and wholesale gasoline was down $0.02 at $1.51 per gallon. Elsewhere, the Bloomberg gold spot price nudged $1.57 higher to $1,528.53 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—rose 0.4% to 98.06.

July preliminary durable goods orders rose 2.1% month-over-month (m/m), compared to the Bloomberg estimate of a 1.2% gain and June’s downwardly-revised 1.8% rise. Ex-transportation, orders declined 0.4% m/m, versus forecasts of a flat reading and compared to June’s negatively-adjusted 0.8% increase. Moreover, orders for non-defense capital goods excluding aircraft, considered a proxy for business spending, advanced 0.4%, compared to projections of a flat reading, and the prior month’s figure was downwardly-revised to a 0.9% rise.

The August Dallas Fed Manufacturing Index unexpectedly improved to a level depicting expansion (a reading above zero), rising to 2.7 from -6.3 in July, and versus expectations of an increase to -4.0.

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