U.S. Stocks Rise as Trump Suggests Flexibility in Tariffs
By Akane Otani and Georgi Kantchev
U.S. stocks rose Thursday, reversing declines from earlier in the session, after the White House said widely debated tariffs on metals imports would spare some key U.S. allies.
Major indexes wobbled around the flatline for much of the day, then climbed in the final hour of trading, as the administration said it would take a narrower approach than initially suggested in imposing tariffs on steel and aluminum imports.
Stocks had come under pressure last week as investors worried that the tariffs -- which the White House had said would be "strict" and not exclude any countries -- could lead to retaliatory trade measures.
Yet on Thursday, President Donald Trump suggested the administration would take a more flexible approach to the rollout -- including exemptions for Canada and Mexico, and opening the way for other countries to negotiate tariff reductions.
That concession, along with others the administration had hinted at earlier in the week, helped stocks regain some ground, with the Dow Jones Industrial Average adding 93.85 points, or 0.4%, to 24895.21 on Thursday. The blue-chip index is on track to post a weekly gain.
The S&P 500 rose 12.17 points, or 0.4%, to 2738.97, while the Nasdaq Composite advanced 31.30 points, or 0.4%, to 7427.95 for its fifth consecutive gain.
Still, investors say volatility, which spiked in February on concerns about rising inflation, will remain elevated as details about the trade plan continue to trickle out.
"We're generally in a more volatile environment, and the market will be sensitive to any headlines," said Randy Warren, chief investment officer of Philadelphia-based Warren Financial.
A flurry of corporate news drove swings in individual stocks.
Cigna shares fell $22.25, or 11%, to $172.00 after the health insurer said it planned to buy Express Scripts, a St. Louis-based pharmacy-benefits manager, for more than $50 billion. Express Scripts shares jumped 6.30, or 8.6%, to 79.72.
Meanwhile, shares of Kroger -- one of the largest supermarket chains in the U.S. -- tumbled 3.25, or 12%, to 22.98 after the company said its profits would suffer as it expands its e-commerce platform in an attempt to take on the likes of Walmart and Amazon.com.
Elsewhere, the European Central Bank left interest rates unchanged Thursday but dropped a pledge to accelerate its bond purchases if the economy deteriorates.
"They're essentially signaling confidence in the economy and saying it's time to take the training wheels off," said Karyn Cavanaugh, senior market strategist at Voya Investment Management.
Yet even as central banks around the world signal they are moving toward normalizing policy, stocks should continue to be able to eke out further gains, especially with corporate earnings looking robust, Ms. Cavanaugh said.
The Stoxx Europe 600 rose 1% and notched its fourth straight daily advance, supported by a rally in technology shares.
Earlier, stocks in Asia broadly closed higher.
Japan's Nikkei Stock Average rose 0.5%, while South Korea's Kospi Composite extended gains from earlier in the week and added 1.3%.
Write to Akane Otani at firstname.lastname@example.org and Georgi Kantchev at email@example.com
(END) Dow Jones Newswires
March 08, 2018 17:03 ET (22:03 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.