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Wall Street higher as U.S.-China trade talks begin
U.S. stocks rose on Monday as gains in the technology and consumer discretionary sectors helped extend Friday`s rally, with investors focused on the ongoing U.S.-China trade talks.
The rally was led by momentum names such as Amazon.com Inc, Netflix Inc and big technology stocks, adding to Friday`s surge of over 3 percent after strong jobs numbers and Federal Reserve Chair Jerome Powell`s comments soothed worries about interest rate hikes.
Fears of a global slowdown have caused sharp pullbacks in the markets over the last few months. But since hitting a 20-month low on Christmas Eve just a rounding error from levels considered to be a bear market, the S&P 500 has now gained over 8.5 percent.
The trade spat has been a major overhang and the effects of tariffs on billions of dollars of goods have started showing up in economic data and a reduction in analysts` estimates for earnings growth rates at S&P 500 companies.
U.S. Commerce Secretary Wilbur Ross said on Monday China and the United States were likely to reach a good settlement over immediate trade issues, while an agreement on structural trade issues and enforcement will be harder.
"We`re looking at commentary from the Fed suggesting they`re going to be flexible around rate hikes, there`s positive commentary on the U.S. trade war," said Christopher Anselmo, director at Nasdaq IR Intelligence. "That positive sentiment is forward looking."
The consumer discretionary index jumped 2.49 percent, while the technology sector gained 1.14 percent.
In economic data, the Institute for Supply Management`s domestic services sector index fell to a five-month low, although one bright spot was a rise in new orders, which Anselmo said was helping sentiment.
At about 11:50 a.m. ET, the Dow Jones Industrial Average was up 156.40 points, or 0.67 percent, at 23,589.56. The S&P 500 was up 23.97 points, or 0.95 percent, at 2,555.91 and the Nasdaq Composite was up 93.60 points, or 1.39 percent, at 6,832.46.
Nine of the 11 major S&P sectors were higher, with only the defensive consumer staples and utilities indexes logging losses.
Utilities were dragged lower by PG&E Corp, which slumped about 22 percent after Reuters reported the company was exploring filing some or all of its business for bankruptcy protection as it faces billions of dollars in liabilities related to fatal wildfires in 2018 and 2017.
Dollar Tree Inc jumped 5.7 percent after activist investor Starboard Value LP called on the company to sell its underperforming Family Dollar business and proposed replacing a majority of its board.
Loxo Oncology Inc surged 65.8 percent after Eli Lilly and Co said it would buy the cancer drug developer for about $8 billion. Lilly fell 1.2 percent.
Advancing issues outnumbered decliners by a 4.56-to-1 ratio on the NYSE and a 3.07-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week highs or new lows, while the Nasdaq recorded 24 new highs and 10 new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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