Wall Street flattens out into Labor Day weekend

Traders work on the floor at the New York Stock Exchange in New York

Dow rises 350 points after China says it wants trade talks

U.S. stocks opened sharply higher on August 29, as China sounded hopeful of a resolution to the long-standing trade dispute with the United States, allaying investor worries of the risk of a recession.

By midday, the Dow Jones Industrial Average was trading 350 points higher, or 1.4 percent.

But the broader S&P 500 ended essentially flat, up less than a tenth of a per cent at 2,926.46, while the tech-heavy Nasdaq fell 0.1 per cent to close out the month at 7,962.88. The Nasdaq Composite Index dropped 31.43 points, or 0.39 per cent, to 7,941.96, Xinhua news agency reported. Both companies reported quarterly profits that easily beat analysts' forecasts.

USA financial markets were due to stay closed on Monday for the Labor Day holiday and a new round of US tariffs on some Chinese goods were expected to come into effect on Sunday.

The three main indexes opened higher, following data which showed strong USA consumer spending in July and signals from Washington and Beijing on Thursday, that they will resume trade talks, as the countries discussed the next round of in-person negotiations in September. Shares of Estee Lauder Cos Inc EL.N , e.l.f. Beauty Inc ELF.N and Coty Inc COTY.N dropped between 0.5% and 1.3%.

In an interview with Bloomberg, Treasury Secretary Steven Mnuchin said talks with China are ongoing and are expected to continue in Washington, though he did not specify when.

Trading turned volatile in August as investors anxious that the escalating trade war between the USA and China and slowing global economy could tip the US into a recession.

Last week, the trade conflict escalated again with both sides threatening new tariffs on each other's goods, triggering a sharp sell-off in global markets.

Shares of the USA consumer electronics retailer slid 9%, while those of the teen retailer tumbled 12%.

Financial and industrial stocks were the big winners Friday as the market posted its first weekly gain in five weeks.

US food company Campbell Soup Co CPB.N rose 3.1% after it reported better-than-expected fourth-quarter profit. Ulta Beauty plunged 25% after reporting weak results and cutting its estimates.

Some of the Trump administration's additional tariffs on Chinese products take effect Sunday and others on December 15.

The benchmark S&P 500 .SPX index has fallen 3.4% from its record high hit in late July.

Investors are also bracing for a new round of US tariffs on some Chinese goods that would come into effect on Sunday.

Industrial names that have also been highly correlated to trade progress, such as United Technologies, advanced, with the sector up 1.77 per cent. Heating oil declined 3 cents to $1.83 per gallon.

The S&P index recorded 20 new 52-week highs and no new low, while the Nasdaq recorded 23 new highs and 12 new lows.

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