Tech stocks power Wall Street after trade war rout

Reuters New York, NY, USA May 14, 2019, 10.39 PM(IST)

File photo. Photograph:( Others )

Story highlights

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 per cent off the S&P 500.

US stocks climbed on Tuesday, as investors picked up beaten-down technology and industrial stocks following optimistic comments from Washington and Beijing that tempered concerns about a further escalation in the trade war.

Technology shares rose 1.56 per cent, the most among major S&P sectors, lifted by gains in Microsoft Corp, Visa Inc and chipmakers.

Wall Street witnessed one of its worst selloffs this year in the previous session, with the S&P and the Dow recording their largest percentage drops since January 3rd, after China announced retaliatory tariffs on US goods.

Markets took relief from comments by US President Donald Trump that he would talk with Chinese counterpart at a G20 Summit in late June and China said on Tuesday both sides have agreed to keep the talks going.

"Today's reaction is investors looking for value," said Peter Cecchini, managing director and chief market strategist at Cantor Fitzgerald in New York.

"There is still a concern around the evolution of the trade talks. The US has stood out relative to the rest of the world when it comes to its economic performance, and it is arguable whether or not that can be sustained."

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 per cent off the S&P 500 since hitting an all-time high on May 1st.

At 11:19 a.m. ET, the Dow Jones Industrial Average was up 251.49 points, or 0.99%, at 25,576.48, the S&P 500 was up 27.69 points, or 0.98%, at 2,839.56 and the Nasdaq Composite was up 86.94 points, or 1.14%, at 7,733.97.

Nine of the 11 major S&P sectors were higher, with technology, energy, industrial and financial sectors gaining more than 1 per cent.

The tech sector took a beating on Monday as many tech companies rely on China for a large part of their revenue.

Boeing Co shares were up 2 per cent, providing the biggest boost to the Dow. The company said it handed over 24 per cent 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 2% 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 1.9 per cent 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 7 per cent, 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 3.07-to-1 ratio on the NYSE and a 2.31-to-1 ratio on the Nasdaq. The S&P index recorded 15 new 52-week highs and six new lows, while the Nasdaq recorded 30 new highs and 63 new lows.