Stocks climbed Thursday as major indexes extended a rebound into a third day. The dollar dropped, a change that provided a relief to big exporters like industrial and technology companies.
The U.S. stock market continued its gradual rebound from a plunge that lasted almost the entire month of October, and many of the biggest gains Thursday came from stocks that struggled badly last month like chipmakers and other technology companies and smaller, domestically-focused companies.
Stocks headed higher after U.S. President Donald Trump tweeted that he had spoken to Chinese President Xi Jinping and that the two countries were making some progress in trade negotiations. He didn’t give details, but there have been few signs of movement in the trade dispute in recent months, and investors are getting nervous about the prospect of huge tariff increases.
Liz Ann Sonders, chief investment strategist for Charles Schwab, said one reason for the market rout was that companies started to give more details about how much the tariffs could hurt them.
“Companies are saying ‘this is biting and here’s how,'” she said. “They’re starting to talk about profit margins and whether they’re going to pass the expenses onto consumers.”
Strong earnings from U.S. companies have helped the market recover its footing over the last three days. Chemicals maker DowDuPont jumped after reporting a strong quarter, as did Arm & Hammer maker Church & Dwight and insurer AIG. Apple climbed 1.5 percent to $222.22 prior to releasing its quarterly report, but it slumped 4 percent in aftermarket trading after reporting that it sold fewer iPhones than analysts expected and gave a weak forecast for the current period.
The S&P 500 index added 28.63 points, or 1.1 percent, to 2,740.37. The Dow Jones Industrial Average picked up 264.98 points, or 1.1 percent, to 25,380.74. The Nasdaq composite climbed 128.16 points, or 1.8 percent, to 7,434.06. The Russell 2000 index jumped 33.57 points, or 2.2 percent, to 1,544.98.
Stocks fell sharply from early October through the last few days of the month, a skid that briefly wiped out their gains for the year. After a rally over the last two days, the S&P 500 is up 2.5 percent in 2018.
During the sell-off, high-growth companies like technology and industrial companies and smaller stocks were hit especially hard as investors worried about various factors that could slow their growth and their profits. Those included the U.S.-China trade fight, rising interest rates that could make it more expensive to borrow money, and higher costs for fuel and other necessities.
Chemicals maker DowDuPont surged 8.1 percent to $58.27 after its third-quarter profit surpassed analysts’ estimates. The company said sales grew in all regions, with strong gains in Asia-Pacific and Latin America. DowDuPont also said it expects to save more money from a cost-cutting program and plans to buy back another $3 billion in stock.
Fertilizer and chemicals maker CF Industries jumped 6.3 percent to $51.05 after it said it expects better nitrogen fertilizer prices over the next few years.
Exporters rose as the dollar slumped. The ICE US Dollar Index slid 0.9 percent after reaching a 16-month high on Wednesday. A weaker dollar helps companies that do a lot of business outside the U.S., as it makes their products more affordable in foreign markets and also increases their profits when they are translated back into dollars.
Boeing rose 2.3 percent to $363.07 while farm equipment maker Deere added 3.8 percent to $140.65. Among chipmakers, Nvidia gained 3.5 percent to $218.11 and Advanced Micro devices leaped 11 percent to $20.22. The S&P 500 fell 6.9 percent last month, and technology and industrial companies and retailers fared even worse.
The decline in the dollar also sent metals prices sharply higher. Gold jumped 1.9 percent to $1,238.60 an ounce. Silver soared 3.5 percent to $14.78 an ounce. Copper gained 2.4 percent to $2.72 a pound.
The pound rose sharply following reports that Britain and the European Union had reached a deal to give U.K. financial services companies access to the bloc after Brexit. The article by The Times cited anonymous sources, and other reports suggested a deal had not yet been finalized. The British pound rose to $1.3018 from $1.2771.
Canadian energy company Encana said it will buy oil and gas company Newfield Exploration for $5.5 billion in stock. Newfield climbed 16.1 percent to $23.46, while Encana dropped 12.6 percent on the Toronto Stock Exchange.
Germany’s DAX rose 0.2 percent and the British FTSE 100 dipped 0.2 percent. After a big rally Wednesday, the CAC 40 in France fell 0.2 percent.
Hong Kong’s Hang Seng gained 1.7 percent while Tokyo’s Nikkei 225 index tumbled 1.1 percent. The Kospi in South Korea finished 0.3 percent lower.
Oil prices continued to weaken after the Department of Energy said U.S. crude stockpiles increased for the sixth straight week. Benchmark U.S. crude slumped 2.5 percent to $63.69 a barrel in New York. Brent crude, used to price international oils, shed 2.9 percent to $72.89 a barrel in London.
Wholesale gasoline fell 2 percent to $1.72 a gallon and heating oil skidded 2.2 percent to $2.20 a gallon. Natural gas fell 0.7 percent to $3.24 per 1,000 cubic feet.
Bond prices turned higher. The yield on the 10-year Treasury note fell to 3.14 percent from 3.15 percent.
The dollar fell to 112.69 yen from 113.06 yen. The euro rose to $1.1409 from $1.1314.
AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP