Wall Street gains on trade optimism, progress to avert government shutdown
Wall Street rose on Tuesday, fueled by a tentative deal reached by U.S. lawmakers to avoid another partial government shutdown and optimism that the United States and China could reach an agreement during their ongoing trade talks.
However, it was unclear if President Donald Trump would embrace the deal as congressional aides said it did not contain the $5.7 billion he wants for a border wall.
"What investors are taking from this is that the government stays open, whether or not Trump signs on the deal is secondary," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
"There is a lot of optimism around the trade talks and hopes for some kind of a deal in the making."
The talks resumed on Monday and U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer arrived in Beijing on Tuesday, ahead of high-level talks scheduled later this week.
The world`s two biggest economies are seeking to strike a deal before a March 1 deadline, when additional U.S. tariffs on Chinese imports will come into force.
Trade-sensitive industrials rose 0.96 percent, boosted by Boeing Inc, Caterpillar Inc and 3M Co.
Chipmakers, which depend on China for a huge chunk of their revenue, also gained and pushed the Philadelphia chip index 1.64 percent higher. The broader technology sector rose 0.81 percent.
Trade war topped the list of biggest tail risks for the ninth straight month, followed by a slowdown in China, according to Bank of America Merrill Lynch`s February survey of fund managers.
The S&P 500 index is just 7 percent away from its Sept. 20 record closing high, driven by optimism on trade, a largely upbeat fourth-quarter earnings season and a dovish Federal Reserve.
About 71 percent of the S&P companies that have posted earnings have topped expectations, according to IBES data from Refinitiv. But analysts` estimates for first-quarter earnings have turned negative for the first time since 2016.
At 9:41 a.m. ET, the Dow Jones Industrial Average was up 232.44 points, or 0.93 percent, at 25,285.55. The S&P 500 was up 22.40 points, or 0.83 percent, at 2,732.20 and the Nasdaq Composite was up 65.29 points, or 0.89 percent, at 7,373.20.
Energy rose 1.63 percent, the most among the S&P sectors, after oil prices jumped 2 percent supported by OPEC-led production cuts.
Coty Inc surged 14 percent, the most on the S&P, after German conglomerate JAB Holding Co said it planned to hike its stake in the cosmetics maker.
Electronic Arts Inc jumped 4.7 percent after the videogame maker`s newly launched battle royale game gained traction. Rival Take-Two lost 5.6 percent following a downgrade by a 5-star analyst.
Gilead Sciences Inc fell 4.2 percent after its liver disease drug failed a late-stage study.
Advancing issues outnumbered decliners by a 4.14-to-1 ratio on the NYSE and by a 4.31-to-1 ratio on the Nasdaq.
The S&P index recorded 21 new 52-week highs and one new low, while the Nasdaq recorded 39 new highs and three new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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