US Stocks Open: DJIA Higher On European Economic Data

Stocks opened higher Monday on strong economic data from Europe and expectations of a rate cut by the U.S. Federal Reserve next week.

At midday, the Dow Jones Industrial Average opened higher, up 58.92 points or 0.21%. The S&P 500 was up 2.74 points or 0.09% while the Nasdaq added 5.26 points or 0.06%.

Investors remained on edge, however, as signs of a weakening economy reared. The Wall Street Journal reported money managers are worried the S&P 500 won’t be able to hang onto the 19% in gains it has made this year, despite being within 2% of July’s all-time high. Worries over the U.S.-China trade spat and signs of an economic malaise in Europe and Asia were pressing despite signs of strength among consumers and in the services industry.

A weaker-than-expected U.S. jobs report Friday had a negative impact on bonds, sending yields higher, portending the expected interest rate cut, albeit smaller than originally touted, an expectation Fed Chairman Jerome Powell seemed to leave on the table during a speech Friday at an economic forum in Switzerland.

European bond yields were higher across the board on hopes the European Central Bank would cut rates following remarks by incoming President Christine Lagarde that indicated she would continue to follow easing policy. European shares also benefited from moves in the British Parliament to prevent a no-deal Brexit and positive German export numbers.

At the close, London’s FTSE 100 was off 55.13 or 0.76%, the German DAX rose 23.12 or 0.19% and the French CAC was off 15.04 or 0.27%. Thge pound rose 0.65% against the dollar.

Asian equities moved higher Monday following China’s decision to ease banking requirement ratios, which could free up $126 billion. Chinese shares, however, were dampened by weak trade data, with the Shanghai Composite Index moving just 0.8% higher. Data indicated Chinese imports were lower for the fourth straight month in August, with U.S. exports dropping further as a result of the U.S.-China trade war.

Japan’s Nikkei closed 0.5% higher while the Hang Seng Index and Australia’s S&P/ASX 200 were flat.

Crude oil futures traded 2.48% higher. Both gold and silver futures were off, 0.46% and 0.19%, respectively.