Tech stocks power Wall Street's recovery from trade-led selloff

Business


(Reuters) – U.S. stock indexes rebounded on Tuesday from one of their worst selloffs in 2019, as investors saw value in technology stocks that took a hit on Monday from heightened trade tensions between the United States and China.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 13, 2019. REUTERS/Brendan McDermid

Investors took relief from reconciliatory comments by both sides. While China said it will the keep talks going, U.S. President Donald Trump said he would talk with his Chinese counterpart at a G20 Summit in late June.

Technology shares, which posted their biggest daily percentage loss in more than four months, rose 1.9%, lifted by gains in Microsoft Corp, Apple Inc and chipmakers.

“We’re seeing trade optimism from semi-market friendly tweets from Trump. If we’re still talking then it means that a deal could be done soon,” said Jerry Lucas, senior trading strategist at UBS Global Wealth Management.

“We’re in a highly uncertain period right now, and the market is going to oscillate between good and bad days.”

Prospects of the global economy being derailed by the United States and China sliding into a fiercer, more protracted dispute has knocked more than 4% off the S&P 500 since hitting an all-time high on May 1.

At 12:56 p.m. ET the Dow Jones Industrial Average was up 294.10 points, or 1.16%, at 25,619.09, the S&P 500 was up 33.78 points, or 1.20%, at 2,845.65 and the Nasdaq Composite was up 109.44 points, or 1.43%, at 7,756.47.

Nine of the 11 major S&P sectors were higher, with technology, energy, industrial, material, consumer discretionary and financial sectors gaining more than 1%.

Boeing Co shares were up 2%, providing the biggest boost to the Dow. The company said it handed over 24% fewer jet airplanes in the first four months of 2019, hurt by the grounding of its 737 MAX aircraft.

Coca-Cola Co’s shares rose 1.8% after Morgan Stanley upgraded the stock to “overweight”, saying higher growth had not been priced into the stock’s valuation.

Walt Disney Co’s shares gained 2.2% after it signed a pact with Comcast Corp to assume full operational control of streaming service Hulu.

Luxury apparel maker Ralph Lauren Corp’s shares fell 5.7%, the most on the S&P 500, as weak sales in its biggest market, North America, overshadowed quarterly profit beat.

Advancing issues outnumbered decliners by a 3.51-to-1 ratio on the NYSE and a 2.70-to-1 ratio on the Nasdaq.

The S&P index recorded 17 new 52-week highs and six new lows, while the Nasdaq recorded 36 new highs and 75 new lows.

Reporting by Sruthi Shankar and Amy Caren Daniel in Bengaluru; Editing by Shounak Dasgupta and Arun Koyyur



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