Dow Rises Over 200 Points as Trump Says China Wants to Return to Negotiating Table

(MarketWatch) – U.S. stocks rose at the start of trade Monday after President Donald Trump said China wants to return to the negotiating table, in the wake of another round of tariffs announced Friday by Beijing and Washington.

How are the major benchmarks performing?

The Dow Jones Industrial Average  DJIA, +0.68%  rose 280 points, or 1.1%, to 25,911, while the S&P 500 index SPX, +0.64%  gained 28 points, or 0.9%, to 2,872. The Nasdaq Composite COMP, +0.83%  rose 73 points, or 0.9%, to 7,822.

On Friday the Dow tumbled 623.34 points, or 2.4%, to end at 25,628.90, leaving the blue-chip gauge with a 1% weekly decline. The S&P 500 fell 75.84 points, or 2.6%, to close at 2,847.11, a weekly fall of 1.4%. The Nasdaq CompositeCOMP, +0.83%  dropped 239.62 points, or 3%, to end at 7,751.77, leaving it with a weekly fall of 1.8%.

What’s driving the market?

Stocks rallied early Monday, erasing a premarket deficit, after Trump said negotiations would begin again in the wake of the U.S. receiving two “very good calls” from Beijing, even though the Chinese said they were not aware of any phone calls. China’s vice premier and top trade negotiator, Liu He, did call for calm and urge dialogue in a speech, however.

Asked if he would considering delaying or canceling tariffs on China, the president said “anything’s possible.”

“Whether or not the phone calls were primarily technical, it seems Trump is concerned the precipitous drop we saw with U.S. equities was dangerously approaching the price gains that came from the biggest rally in his presidency in early 2018,” said Edward Moya, senior market analyst at Oanda, in a note.

Trump’s comments follow a session of steep losses for U.S. stocks Friday, after Trump responded angrily on Twitter to China’s decision to levy retaliatory tariffs, saying that he “hereby ordered” U.S. companies to look for alternatives to China and to try to bring home manufacturing activity. Trump also announced after the market’s close Friday that the U.S. would raise tariffs on $250 billion worth of Chinese goods to 30% from 25%, while tariffs on $300 billion in imports from China would go to 15% from 10%.

On the data front, orders for long-lasting manufactured goods rose 2.1% in July, the Commerce Department estimated Monday, above the 0.9% increase expected by economists polled by MarketWatch. Excluding transportation items, new orders declined by 0.4%. Orders for core capital goods excluding defense and aircraft, a closely watched proxy for business investment, rose 0.4% in July, after a downwardly revised 0.9% rise in May, continuing a trend of slowing capex growth.

The Chicago Fed National Activity Index slowed to -0.36 in July from 0.03 in June, indicating the U.S. economy is growing below trend. The three-month moving average slowed to -0.19 in July from -0.15 in June.

In European economic data, the German Ifo Institute warned there are even more indications of a recession in Germany after its latest survey data. Headline business sentiment came in at its weakest level since November 2012 at 94.3 versus consensus 95.1 and prior 95.7. Ifo Institute said last time industrial companies demonstrated such pessimism was in the crisis year of 2009.

Which stocks are in focus?

Shares of Amgen Inc. AMGN, +3.12%  rose 0.8% early Monday, after the biotechnology firm announced an agreement to buy Otezla, a subsidiary ofCelgene Corp. CELG, +3.16%  for $13.4 billion in cash. Bristol-Myers Squibb Co.BMY, +3.18%  said that the deal was part of the regulatory approval process for its pending acquisition of Celgene.

Pitney Bowes Inc. PBI, +1.25%  said Monday that it was selling it s software solutions business to data company Syncsort for $700 million. Shares surged 13.4%.

Shares of Dish Network Corp. DISH, +4.32%  rose 3.4% before the start of trade Monday, after Raymond James analyst Ric Prentiss issued a double-upgrade on the company the stock’s, which has fallen 9.3% during the past three months.

How are other markets trading?

The yield of the 10-year U.S. Treasury note TMUBMUSD10Y, -0.55% rose 0.8 basis point to 1.527%, while that of the 2-year note TMUBMUSD02Y, -0.56% was down about one basis point to 1.519%.

Stocks in Asia closed sharply lower overnight, with the China CSI 300000300, -1.44%  falling 1.4%, Japan’s Nikkei 225 NIK, -2.17%  tumbling 2.2% and the Hang Seng Index HSI, -1.91%  retreating 1.9%. Stocks in Europe were flat, according to the Stoxx Europe 600 SXXP, -0.26%.

In commodities markets, the price of crude oil CLV19, +0.57%  was up 1.5%, while gold GCZ19, +0.39%  edged 0.1% higher. The U.S. dollar DXY, +0.34%, meanwhile, rose 0.3% relative to a basket of its major trading partners.