Global stock markets: Wall Strret rises as tech shares rebound after Huawei reprieve
Shares of technology companies helped push Wall Street forward on Tuesday after the United States temporarily eased curbs on China`s Huawei Technologies Co Ltd.
Shares of technology companies helped push Wall Street forward on Tuesday after the United States temporarily eased curbs on China`s Huawei Technologies Co Ltd, alleviating investor concerns about pressure on future corporate results in the sector. U.S. President Donald Trump added Huawei to a trade blacklist last week, leading several companies to suspend business with the world`s largest telecom equipment maker, a move that could weigh on their sales. Chipmakers, many of which sell to Huawei, bore the brunt of Monday`s sell-off.
But late on Monday, the United States granted the Chinese telecoms equipment maker a license to buy U.S. goods until Aug. 19. The development offered a reprieve to shares of chipmakers, with the Philadelphia Semiconductor Index gaining 2.1% in a bid to end a three-day slump. Shares of Huawei suppliers such as Intel Corp, Qualcomm Inc, Xilinx Inc and Broadcom Inc rose between 1% and 4.5%.
Technology shares rose 1.3% to add the most gains to the S&P 500 among the benchmark index`s major sectors. "The groups that have been beaten up for the past couple of days have gotten a reprieve," said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta. "Huawei cast a cloud over tech. It`s so broad-based in how many companies connect with it."
The Dow Jones Industrial Average rose 185.87 points, or 0.72%, to 25,865.77, the S&P 500 gained 25.69 points, or 0.90%, to 2,865.92 and the Nasdaq Composite added 88.86 points, or 1.15%, to 7,791.24. Even with Tuesday`s gains, the S&P 500 is still on track to post its biggest monthly decline of the year. The index is now 3% away from its all-time high on May 1 as it has been pressured by mounting concerns about a prolonged U.S.-China trade war.
Among the S&P 500`s major sectors, only defensive consumer staples shares were trading lower, down 0.2%. Shares of Kohl`s Corp and J.C. Penney Co Inc plunged after the two department stores` quarterly results missed expectations. Kohl`s shares dropped 11.1%, the largest decline among S&P 500 companies, after the retailer cut its full-year profit forecast and reported quarterly same-store sales and profit that missed expectations.
Shares of rival J.C. Penney Co Inc fell 8.7% after the company also reported a bigger-than-expected fall in quarterly same-store sales. With over 460 of S&P 500 companies having posted first-quarter results, 75.2% have topped analysts` profit expectations. Analysts now expect first-quarter earnings growth of 1.4%, a sharp turnaround from the 2% loss expected on April 1, according to Refinitiv data.
Advancing issues outnumbered declining ones on the NYSE by a 3.42-to-1 ratio; on Nasdaq, a 2.29-to-1 ratio favored advancers. The S&P 500 posted 38 new 52-week highs and five new lows; the Nasdaq Composite recorded 53 new highs and 72 new lows.