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BUSINESS Thursday 11 July 2019
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Stocks rise, led by tech sector, as Fed signals rate cut

By ALEX VEIGA Russell 2000 index of smaller
Associated Press company stocks rebound-
Stocks moved higher ed from a brief slide, gain-
Wednesday as Wall Street ing 0.4%.
welcomed new signals from Major stock indexes in Eu-
the Federal Reserve that rope were mixed.
the central bank is ready to SIGNALING A RATE CUT:
cut interest rates for the first Powell’s testified before the
time in a decade. House Financial Services
Fed Chairman Jerome Committee. On Thursday,
Powell said that many Fed he appears before the Sen-
officials believe a weaken- ate Banking Committee.
ing global economy and His testimony comes at a
rising trade tensions have time when the U.S. eco-
strengthened the case for nomic landscape is mixed.
a rate cut. While the job market ap-
Powell’s remarks, which pears resilient and con-
he delivered as part of his sumer spending and home
semi-annual monetary re- sales look solid, the econo-
port to Congress, allayed my is likely slowing. And the
investors’ concerns that an U.S. trade disputes have
unexpectedly strong U.S. added uncertainty to the
jobs report on Friday might economic outlook.
give the Fed reason to stay In this June 18, 2019, file photo specialist Dilip Patel works at his post on the floor of the New York In his prepared statement,
put on interest rates. Stock Exchange. Powell said that since Fed
“Investors are increasingly Associated Press officials met last month,
confident that the Fed will sent the S&P 500 index trad- sumer goods makers also bond yields decline they “uncertainties around
cut rates by a quarter-point ing above 3,000 for the first rose. Take-Two Interactive drive the interest rates that trade tensions and con-
at the end of the month, time before losing some of added 1.6% and Procter & lenders charge for mort- cerns about the strength
which most investors ex- its momentum by midmorn- Gamble picked up 1%. gages and other loans low- of the global economy
pected,” said Kate Warne, ing. Even so, the bench- Energy stocks also head- er. Citizens Financial Group continue to weigh on the
chief investment strategist mark index is on track to ed higher as the price of dropped 2.1%. U.S. economic outlook.”
at Edward Jones. “This re- close at an all-time high. U.S. crude oil climbed 4%. Industrials and materials Meanwhile, inflation has
moved a little bit of the un- The index hit record highs Chevron rose 1.4%. stocks also lagged the mar- fallen farther from the Fed’s
certainty there, and that’s three straight days last Bond prices rose sharply, ket. Deere & Co. slid 1.1% target.
why we’re seeing stocks week. sending the yield in the 10- and Corteva lost 1%. The Fed’s benchmark rate
move higher.” Technology companies year Treasury note down KEEPING SCORE: The S&P currently stands in a range
The market rallied through accounted for much of to 2.07% from 2.10% shortly 500 index rose 0.6% as of of 2.25% to 2.5% after the
much of June after the Fed the market’s gains. Micron before Powell’s remarks 1:47 p.m. Eastern time. central bank boosted rates
first signaled that it might Technology climbed 3.5% were released at 8:30 a.m. The Dow Jones Industrial four times last year. Many
cut rates if necessary to and Western Digital rose Eastern Time. Average gained 128 points, investors have put the odds
shore up the U.S. economy. 4.4%. Communications The drop in yields pulled or 0.5%, to 26,912. The Nas- of a rate cut this month at
Wednesday’s rally briefly services stocks and con- bank shares lower. When daq added 0.8% and the 100%.q

China’s June auto sales fall, extending year-old decline

By JOE McDONALD ative last June as jittery of pure-electric and gas-
Associated Press consumers put off big pur- oline-electric hybrid SUVs,
BEIJING (AP) — China’s chases amid unease about sedans and minivans rose
auto sales fell 7.8% in June China’s economic outlook 80% to 152,000.
amid a trade fight with and tensions with President Beijing has promoted elec-
Washington and slower Donald Trump over Beijing’s trics with billions of dollars in
economic growth, extend- technology ambitions. research grants and buyer
ing an unexpectedly pain- Growth in the second-larg- subsidies. But subsidies are
ful downturn for automak- est global economy held due to end next year and
ers that are spending heav- steady in the latest quarter regulators are shifting the
ily to develop electric cars. but that was supported by burden to automakers by
Drivers in the global indus- government spending and imposing mandatory sales
try’s biggest market bought higher bank lending. targets for electrics.
1.7 million SUVs, sedans and The past year is “a sobering That requires automakers
minivans, according to an lesson for anyone who be- In this April 16, 2019, file photo, Wang Chuanfu, chairman and to pour money into devel-
industry group, the China lieved that growth in autos president of BYD Auto, the biggest global electric brand by oping electrics that can
Association of Automobile could happen in straight sales volume, prepares to show the latest cars during the Auto compete with gasoline-
Manufacturers. lines,” Bernstein analysts Shanghai 2019 show in Shanghai. powered vehicles on price,
Total purchases in the first Robin Zhu and Luke Hong Associated Press performance and style.
six months of 2019 fell 14% said in a report this week. for electric cars. Last year’s buses, declined 9.6% from One of China’s most am-
from a year earlier to 10.1 “As it turned out, autos is auto sales suffered their a year earlier to 2 million. bitious domestic brands,
million vehicles, CAAM cyclical, even in China.” first decline in nearly three June sales by Chinese Geely Auto, reported this
said. That was below indus- That is squeezing global decades, falling 4.1% from brands declined 12.2% week its June sales were
try forecasts of flat to slight- and Chinese automakers 2017 to 23.7 million. to 664,000. Their market down 29%. It warned its
ly lower growth this year. that are racing to meet In June, total vehicle pur- share lost 3.9 percentage first-half profit would fall by
Sales growth turned neg- government sales targets chases, including trucks points to 39.5%. Purchases 40%.q