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Wall Street Closes Higher              05/29 16:20

   Stocks closed out a solid week on Wall Street Friday with a late-afternoon 
rebound after worries that President Donald Trump would reignite a costly trade 
war with China faded.

   (AP) -- Stocks closed out a solid week on Wall Street Friday with a 
late-afternoon rebound after worries that President Donald Trump would reignite 
a costly trade war with China faded.

   The benchmark S&P 500 index rose 0.5%, recovering from a 1% slide, after 
Trump outlined several actions in response to a move by China to exert more 
control over Hong Kong but steered clear of upending a trade pact struck with 
Beijing earlier this year. The S&P 500 ended the month 4.5% higher, its second 
monthly gain in a row.

   The world's two largest economies agreed to a Phase 1 trade deal in January 
after more than a year of talks and billions of dollars in tariffs imposed on 
each other's imports. Worries that the Trump administration would pull out of 
the deal with the world's second-largest economy weighed on the market for much 
of the day, until the president's mid-afternoon statement.

   "Much ado about nothing," Sam Stovall, chief investment strategist at CFRA, 
said of the remarks. "The immediate concern, meaning the cessation of the Phase 
1 (trade) accord, did not end up being put on the table, much to traders' 
relief."

   Technology and health care stocks accounted for much of the market's gains. 
That helped offset losses in banks, industrial companies and elsewhere. Bond 
yields fell and gold prices rose, signs that investors remain cautious. Oil 
recovered from an early slide.

   All told, the S&P 500 rose 14.58 points to 3,044.31. The index ended the 
week with a 3% gain. The Dow Jones Industrial Average fell 17.53 points, or 
0.1%, to 25,383.11. The Nasdaq composite, which is heavily weighted with 
technology stocks, gained 120.88 points, or 1.3%, to 9,489.87. The Russell 2000 
index of small company stocks gave up 6.64 points, or 0.5%, to 1,394.04.

   Stocks have now recouped most of their losses after the initial economic 
fallout from the coronavirus pandemic knocked the market into a breathtaking 
skid in February and March, though the S&P 500 is still down 10% from its 
all-time high in February.

   On Thursday, China's National People's Congress approved a national security 
law aimed at suppressing secessionist and subversive activity in Hong Kong, 
overriding any potential opposition by local lawmakers.

   In his remarks, Trump blasted China, saying Hong Kong is no longer 
"sufficiently autonomous" to warrant the preferred status that the U.S. had 
been giving the former British colony when it comes to export controls, 
extradition treaties and travel.

   "Basically, he's going to treat Hong Kong the way he treats China," Stovall 
said.

   Trump also said the U.S. would cut ties with the World Health Organization, 
saying it had failed to adequately respond to the coronavirus because China has 
"total control" over the global organization.

   The move by China to get a tighter grip on Hong Kong could undermine the 
city's status as a major center for trade and finance. Hong Kong's Hang Seng 
index finished 0.7% lower Friday.

   Washington and Beijing have been trading harsh rhetoric recently on 
everything from Hong Kong to the response to the coronavirus outbreak. That 
stoked worries that the renewed tensions could lead to another punishing round 
of escalating tariffs between the two countries, which would only further 
damage a global economy punished by a severe recession due to the pandemic.

   The U.S. stock market plunged 34% from late February through late March but 
has rebounded quickly since then after the Federal Reserve and Congress pledged 
unprecedented amounts of aid for the economy. Recently, investors have favored 
stocks that would benefit the most from a reopening economy.

   Governments around the country and around the world are slowly lifting 
restrictions meant to corral the outbreak. That has many investors hoping the 
worst of the recession has already passed, or will soon. However, concerns 
remain that the relaxing of stay-at-home mandates and the reopening of 
businesses could lead to another surge in infections, potentially extending how 
long it will take for the economy to recover.

   "We're in an incredibly fragile economy right now, and things are just 
getting back," said J.J. Kinahan, chief market strategist at TD Ameritrade. 
"You need as much momentum as you can that encourages people to go out and 
spend money. Anything that upsets that fragile sort of enterprise has the 
opportunity to really set the stock market and the total economy off course."

   The yield on the 10-year Treasury, a benchmark for interest rates on many 
consumer loans including mortgages, fell to 0.65% from 0.70% late Thursday. 
Lower yields mean investors are cautious about the prospects for economic 
growth and healthy amounts of inflation.

   Oil prices rose. Benchmark U.S. crude oil for July delivery rose $1.78 to 
settle at $35.49 a barrel. Brent crude oil for July delivery rose 4 cents to 
$35.33 a barrel.

   Stock indexes in Europe closed broadly lower following a mixed finish in 
Asian markets.

 
 
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