Financial Markets                      06/30 09:44

   

   NEW YORK (AP) -- U.S. stocks are adding to their records on Monday as Wall 
Street nears the finish of a second straight winning month.

   The S&P 500 was 0.2% higher in its first trading after completing a stunning 
rebound from its springtime sell-off of roughly 20%. The Dow Jones Industrial 
Average was up 146 points, or 0.3%, as of 10:30 a.m. Eastern time, and the 
Nasdaq composite was 0.2% higher.

   Stocks got a boost after Canada said it's rescinding a planned tax on U.S. 
technology firms and resuming talks on trade with the United States. On Friday, 
U.S. President Donald Trump had said he was suspending talks with Canada 
because of his anger with the tax, which he called "a direct and blatant attack 
on our country."

   One of the main reasons U.S. stocks came back so quickly from their 
springtime swoon has been hope that Trump will reach deals with other countries 
to lower his stiff proposed tariffs. Otherwise, the fear is that trade wars 
could stifle the economy and send inflation higher.

   Many of Trump's announced tariffs are currently on pause, and they're 
scheduled to kick back into effect in a little more than a week.

   In an interview with Fox News Channel's "Sunday Morning Futures," Trump said 
his administration will notify countries that the trade penalties will take 
effect unless there are deals with the United States. Letters will start going 
out "pretty soon" before the approaching deadline, he said.

   The U.S. stock market being back at a record high could actually raise the 
risk of renewed escalations on tariffs, according to strategists at Deutsche 
Bank led by Parag Thatte and Binky Chadha. They point to the pattern in 2018 
and 2019 of rallies for the market prompting escalations for tariffs, which 
then drove market pullbacks followed by relents on tariffs that then sparked 
rallies again.

   "Despite the rhetoric to the contrary, this dynamic looks alive and well," 
the strategists wrote in a report. "In our view, beyond the market reaction, if 
negative impacts of tariffs on growth, earnings or inflation start to 
materialize, we will get further relents."

   On Wall Street, GMS' stock jumped 11.8% after the supplier of specialty 
building products said it agreed to sell itself to a Home Depot subsidiary in a 
deal that would pay $110.00 per share in cash. That would give it a total value 
of roughly $5.5 billion, including debt.

   Less than two weeks ago, another company, QXO, said it was offering to buy 
GMS for $95.20 per share in cash. After the announcement of the Home Depot bid, 
QXO's stock rose 1.9%, and Home Depot's stock slipped 0.5%.

   Hewlett Packard Enterprise rallied 13.1% and Juniper Networks climbed 8.4% 
after saying they had reached an agreement with the U.S. Department of Justice 
that could clear the way for their merger go through, subject to court 
approval. HPE is trying to buy Juniper in a $14 billion deal.

   In the bond market, Treasury yields eased a bit ahead of major economic 
reports later in the week. The highlight will be Thursday's jobs report. It's 
often the most anticipated economic data of each month, and it will come a day 
earlier than usual because of the Fourth of July holiday.

   The job market has remained relatively steady recently, even in the face of 
tariffs, but hiring has slowed. Economists expect Thursday's data to show 
another slowdown in overall hiring, down to 115,000 jobs in June from 139,000 
in May.

   Such data has kept the Federal Reserve on hold this year when it comes to 
interest rates. Fed Chair Jerome Powell has said repeatedly that it's waiting 
for more data to show how tariffs will affect the economy and inflation before 
resuming its cuts to interest rates. That's because lower rates can fan 
inflation higher, along with giving the economy a boost.

   Trump, meanwhile, has been pushing for more cuts to rates and for them to 
happen soon. Two of his appointees to the Fed have said recently they could 
consider cutting rates as soon as the Fed's next meeting in less than a month.

   The yield on the 10-year Treasury slipped to 4.27% from 4.29% late Friday.

   In stock markets abroad, indexes dipped modestly in Europe following a more 
mixed finish in Asia.

   Stocks fell 0.9% in Hong Kong but rose 0.6% in Shanghai after China reported 
its factory activity improved slightly in June after Beijing and Washington 
agreed in May to postpone imposing higher tariffs on each others' exports, 
though manufacturing remained in contraction.

   ___

   AP Business Writer Elaine Kurtenbach contributed.

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