Wall Street moves higher as chip stocks rebound
A bounce back in trade-sensitive chipmakers pushed U.S. stocks higher on Tuesday, after Washington cut off a Chinese semiconductor maker from its U.S. suppliers.
The Commerce Department slapped the restriction on Fujian Jinhua Integrated Circuit Co Ltd amid allegations the firm stole intellectual property from Micron Technology Inc and on concerns the firm could flood the market with cheap chips.
Micron rose 1.9 percent, and helped the Philadelphia Semiconductor Index jump 2.63 percent, rebounding after hitting its lowest in over a year on Monday. The broader technology sector was up 0.18 percent.
Chip-gear makers also gained after KLA-Tencor Corp rose 6.6 percent on strong quarterly results and forecast, helped by strength in its memory business.
"There are investors who have wanted to own chipmakers but have been so fearful because of what happened last week," said Peter Kenny, senior market strategist at Global Markets Advisory Group, in New York.
"These players have been prudently on the sidelines but are now seeing an opportunity to gain exposure to semis."
Industrial stocks rose 0.85 percent, getting a boost after President Donald Trump said "a great deal" on trade can be struck with China.
But he also warned that billions of dollars worth of new tariffs are ready if a deal isn`t possible. That echoed the essence of a Bloomberg report on Monday that sent Wall Street tumbling at close.
Tariffs and rising costs are among the factors that have spurred a slew of disappointing forecasts from major industrials, chipmakers and other companies, adding worries over slowing corporate growth to fears of faltering global expansion.
Traders have said the uncertainty over next week`s mid-term elections has also been a factor for the recent volatility.
"Because the impact of the mid-term elections on equities is so poorly defined, we can see it elevating volatility, if not anything," Kenny said.
At 12:56 p.m. ET, the Dow Jones Industrial Average was up 151.25 points, or 0.62 percent, at 24,594.17, the S&P 500 was up 15.31 points, or 0.58 percent, at 2,656.56. The Nasdaq Composite was up 51.82 points, or 0.73 percent, at 7,102.11.
On the earnings front, Coca-Cola Co shares climbed 1.8 percent after beating quarterly sales estimates, while rival PepsiCo Inc dipped 0.1 percent.
But, Pfizer Inc reported worse-than-expected third quarter revenue and lowered the top end of its full-year sales forecast as generic competition and drug pricing pressure in the United States hurt its older drugs business.
Under Armour Inc surged 25.1 percent after beating quarterly estimates and raising its full-year profit forecast on higher overseas sales and lower expenses. Nike Inc rose 2.5 percent.
Facebook Inc was up 0.5 percent, ahead of its quarterly earnings report, which is due after the market closes.
Advancing issues outnumbered decliners by a 1.89-to-1 ratio on the NYSE and by a 1.93-to-1 ratio on the Nasdaq.
The S&P index recorded 10 new 52-week highs and 20 new lows, while the Nasdaq recorded 13 new highs and 158 new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.