Stocks rise on trade hopes but lose much of morning gains

William Geier, Jr., left, and David O'Day work at the New York Stock Exchange, Tuesday, Dec. 11, 2018, in New York. Stock markets around the world spiked higher Tuesday after Wall Street rebounded amid hopes the U.S. and China are back negotiating over their trade dispute. (AP Photo/Mark Lennihan)
William Geier, Jr., left, and David O'Day work at the New York Stock Exchange, Tuesday, Dec. 11, 2018, in New York. Stock markets around the world spiked higher Tuesday after Wall Street rebounded amid hopes the U.S. and China are back negotiating over their trade dispute. (AP Photo/Mark Lennihan)

NEW YORK -- U.S. stock indexes rose Tuesday on hopes that trade tensions between the world's largest economies may ease, though much of the big gains from the morning had evaporated by midday.

The S&P 500 index jumped as much as 1.4 percent in early trading, following even bigger gains in Europe, but it lost more than half the gains as the day wore on.

It's the latest big swing for stocks, which have been mostly falling since late September on worries about the global trade war, rising interest rates and a slowing economy. Even within a single day, stocks have changed direction sharply in recent weeks.

KEEPING SCORE: The S&P 500 was up 11 points, or 0.4 percent, at 2,649 as of noon Eastern time.

Nine of the 11 sectors that make up the S&P 500 were up, with and consumer-focused companies leading the way.

The Dow Jones industrial average rose 26, or 0.1 percent, to 24,449, and the Nasdaq composite rose 42, or 0.6 percent, to 7,063.

U.S.-CHINA RELATIONS: U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He have spoken by phone about "the promotion of the next economic and trade consultations," a statement by China's Commerce Ministry said Tuesday.

That raised hopes that the two countries can make progress on their trade dispute. Investors worry weaker global trade would dent economic growth around the world and corporate profits. The tensions have waxed and waned repeatedly this year, which has helped make the stock market particularly volatile recently.

Another flashpoint for the two countries is the detention of Meng Wanzhou, the chief financial officer of Chinese telecommunications giant Huawei, in Canada. Meng is wanted in the U.S. for allegedly misleading banks about the company's business dealings in Iran. China has protested her arrest.

SENTIMENT DRIVES: The big swings in recent weeks have been more a result of changes in investor optimism and pessimism than about changes in market fundamentals, such as corporate earnings, said Jon Adams, senior investment strategist at BMO Global Asset Management.

That can lead to more volatility, not only week to week but also within each day.

"Traditionally, this wouldn't be enough to move the market this much," Adams said Tuesday morning about progress in talks between the United States and China, when the S&P 500 was still up more than 1 percent for the day. "But sentiment has been moving markets lately."

MARKETS OVERSEAS: In Europe, Germany's DAX was up 1.9 percent, and France's CAC 40 was up 1.7 percent. Britain's FTSE 100 was up 1.7 percent.

In Asia, Japan's Nikkei 225 lost 0.3 percent, South Korea's Kospi fell less than 0.1 percent to 2,052.97 and Hong Kong's Hang Seng edged up 0.1 percent.

BUYBACK BOOST: Bank of New York Mellon and Jazz Pharmaceuticals both rose more than 1.5 percent after announcing increased programs to buy back their own stock. Shareholders often like these purchases because they can goose a company's earnings per share, one of their main measures for success.

Bank of New York Mellon said it would increase its repurchase program by up to $830 million, and its shares rose 1.6 percent to $48.31. Jazz Pharmaceuticals said its board approved an increase of $400 million, and its stock gained 1.8 percent to $142.11.

YIELDS: The yield on the 10-year Treasury held steady at 2.85 percent, while the two-year yield held at 2.73 percent.

The gap between those two yields has been shrinking this year, which has worried some investors. When the 10-year yield falls below the two-year yield, investors call it an "inverted yield curve" and see it as a precursor to a recession.

COMMODITIES: Benchmark U.S. crude oil rose 97 cents to $51.97 per barrel. Brent crude, the international standard, gained 58 cents to $60.55.

Gold slipped $1.10 to $1,248.30 per ounce.

CURRENCIES: The dollar rose to 113.42 Japanese yen from 113.21 yen late Monday. The euro slipped to $1.1314 from $1.1353, and the British pound dipped to $1.2514 from $1.2557.

NW News on 12/12/2018

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