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Dow Jones Today: Stocks Bounce As China Seeks Trade War Truce; Apple Gets Price Target Hike

Stocks bounced into an early rally Wednesday, as China trade war commentary continued to spur volatile trade across global markets. Investors had an ear turned toward roundtable comments from Fed Chief Jerome Powell. The Nasdaq traded 0.7% higher and the S&P 500 ran up 0.6% — both were off their early highs. The Dow Jones today eased to a 0.5% gain.

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Almost half of the 30 Dow Jones industrial stocks rose more than 1% in early trade. Intel (INTC) was among the early leaders, jumping 1.4% as chip stocks rebounded on early reports that China was seeking an interim trade war deal. Chip equipment maker Applied Materials (AMAT) and Nvidia (NVDA) each climbed more than 2% to the top of the Nasdaq 100.

A new $8 billion court loss sent Johnson & Johnson (JNJ) to the bottom of the Dow Jones today.

Refining and oil issues scored some strong early gains. Refiner Valero (VLO) soared 3% to the head of the S&P 500. S&P 500 peer HollyFrontier (HFC) rose almost 3%. Exxon Mobil (XOM) and Chevron (CVX) gained 1.4% and 1.2%, respectively.

(For updates on this story and other market coverage, visit the Stock Market Today.)

Apple Stock Gets Price Target Hike, 5G Pressure

Apple (AAPL) swung more than 1% higher, as Canaccord held its buy rating and raised the price target for Apple stock to 260, from 240. The note cited stronger than expected initial sales for the company's new iPhone 11 products. Also, Nikkei news report Wednesday said that Alphabet's (GOOGL) Google was preparing to launch its 5G smartphone ahead of Apple, as early as next week. Alphabet shares gained 0.9% in morning trade.

Security software play FireEye (FEYE) gained almost 6% after the company affirmed late Tuesday its third-quarter revenue would meet or beat the high end of prior guidance.

IBD 50 stock Boot Barn (BOOT) popped 2.5% on an upgrade to overweight from Stephens & Co.

China-based online retail giant JD.com traded 1% after a Jefferies report outlined the company's strategy for expansion into fresh Chinese markets. China IPO Pinduoduo (PDD) popped almost 2%, after Nomura initiated coverage with a neutral rating and a 34 price target.

China Seeks Interim Trade Deal

News reports said China was offering an olive branch, proposing to purchase an additional $10 billion in U.S. agricultural goods as a first step toward an interim trade agreement when talks begin on Thursday, London's Financial Times reported.

The U.S. on Tuesday ratcheted up its negotiating leverage vs. China, blacklisting 28 Chinese companies and blocking travel visas for specific individuals, for alleged treatment of Muslims in western China. China's top trade team, headed by Vice-Premier Liu He, is scheduled to engage in a new round of trade talks with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Thursday and Friday. A looming round of tariffs is set to go into effect Oct. 15.

"The Chinese are ready to de-escalate," according to officials quoted by the FT, but are also prepared for a total breakdown of negotiations.

In China, markets logged a mixed session with the Shanghai Composite rising 0.4% and Hong Kong's Hang Seng Index down 0.8%. In Japan, stocks cued off Tuesday's market action in the U.S., leaving Tokyo's Nikkei 225 down 0.6%. India snapped a four-session decline, with the Sensex surging 1.7%.

Europe's markets added to their early gains, despite a trade-talk stalemate as the U.K.'s end-of-month Brexit deadline rapidly approaches. Frankfurt's DAX swept 1% higher in afternoon trade. The CAC-40 in Paris was up 0.6%, while London's FTSE 100 held a 0.5% gain.

Fed Chief Powell Speaks

Federal Reserve Chief Jerome Powell joins Kansas City Federal Reserve Bank President Esther George in a roundtable discussion sceduled to begin at 10 a.m. ET. Topics were expected to range from market conditions to local banking, in Kansas City, Mo.

Powell bolstered markets briefly on Tuesday. He announced that the Federal Reserve was preparing a program to begin buying short-term Treasury notes. Rather than the economic stimulus targets of recent bond buying programs, this new effort would be aimed at avoiding the sorts of market pressures that created market volatility in September. Buying of short-term bonds would help hold yields on those bonds low. That makes it less likely the sort of yield-curve inversion that raised recession fears in September.

Dow Jones Today: Apple, Microsoft Climb

Apple gained 1% in early trade, continuing to bob in its buy range above a 221.47 buy point. Microsoft (MSFT) also rose 1%, fighting to regain its 50-day moving average, below a 141.78 buy point in a two-month flat base. Both Microsoft and Apple are current IBD Leaderboard listings.

Johnson & Johnson weighed at the Dow's low end, off 1.2% after a Pennsylvania court ordered it to pay $8 billion in damages related to its antipsychotic treatment Risperdal. A Philadelphia jury found the drugmaker failed to properly warn its antipsychotic drug Risperdal could cause a condition called gynecomastia, an enlarging of breast tissue in men. Johnson & Johnson released a statement saying it would move "to set aside this excessive and unfounded verdict."

The penalty follows a $572 million verdict in Oklahoma in August. It found the company had contributed to the opioid epidemic. And last year, a St. Louis court ordered the company to pay $4.69 billion to a group of women claiming asbestos in J&J's baby powder led to ovarian cancer.

Boot Barn, Pinduoduo Approach Buy Points

IBD 50 stock Boot Barn was more than 3% higher. The company looked to grab back a piece of its 4.9% dive on Tuesday. The highly rated stock ended Tuesday's session 15% below a 37.72 buy point in what IBD MarketSmith chart analysis plots as a cup-with-handle base.

China IPO Pinduoduo opened 1.7% higher. The stock gave up a bit more than 6% on Monday and Tuesday. That left it in its first real test of support at its 10-week moving average. Shares were less than 1% below a 32.09 buy point, following an August breakout from a five-month cup base.

Find Alan R. Elliott on Twitter @IBD_Aelliott

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