US stocks gain as odds of Hong Kong crisis ebb

Wall Street's main indexes rebounded Wednesday after robust economic data from China, easing tensions in Hong Kong and British lawmakers' approval of a law to delay Brexit provided relief to investors worried about global growth.
Traders Michael Urkonis (left) and Robert Charmak work on the floor of the New York Stock Exchange.
Traders Michael Urkonis (left) and Robert Charmak work on the floor of the New York Stock Exchange.PHOTO: AP

NEW YORK (AFP) - Wall Street stocks bounced on Wednesday (Sept 4), shaking off ongoing trade worries following positive developments in Hong Kong and in Britain's Brexit process.

Though they had faltered on Tuesday, major US indices climbed about 1 per cent or more after Hong Kong Chief Executive Carrie Lam formally withdrew a Bill that aimed to allow extradition of criminal suspects to mainland China.

Her action was in response to mass protests that had spurred fears of a crackdown by Beijing.

Meanwhile, British MPs inflicted a fresh defeat on Prime Minister Boris Johnson's hardline Brexit strategy, approving a law that could stop him from taking Britain out of the European Union next month without a deal.

The Dow Jones Industrial Average finished 0.9 per cent higher at 26,335.47.

The broad-based S&P 500 gained 1.1 per cent to 2,937.78, while the tech-rich Nasdaq Composite Index advanced 1.3 per cent to 7,976.88.

Gregori Volokhine, fund manager at Meeschaert Financial Services, said Lam's decision in Hong Kong "removed a big worry" for investors who had feared a muscular response from Beijing to the demonstrations.

 

Markets have factored in the grinding US-China trade war but "a big degradation of the situation in Hong Kong has not been figured in," Volokhine added.

A report Wednesday from the Federal Reserve characterised growth as modest.

"Although concerns regarding tariffs and trade policy uncertainty continued, the majority of businesses remained optimistic about the near-term outlook," the central bank said in nationwide survey of economic activity.

Among individual companies, JetBlue Airways slid 4.5 per cent as it lowered a key revenue forecast, due to weaker-than-expected demand and the expected hit to flights from Hurricane Dorian.