NEW YORK, May 24 — US stocks posted broad-based gains today, ahead of a long weekend, as sentiment was buoyed by optimistic comments by President Donald Trump that the protracted trade war with China could soon end.
Trump said yesterday that Huawei Technologies Co Ltd could be included in the trade deal. However, no high-level talks have been scheduled since the last round of negotiations in Washington two weeks ago.
The US President will meet his Chinese counterpart Xi Jinping at the G20 meeting next month in Japan.
Earlier this week, while Washington temporarily relaxed its ban on Huawei, there were reports that it was planning a similar ban on another Chinese firm, making investors worry that such moves would have a lasting effect on the global technology supply chain.
“I don’t see enormous amounts of positive news out there although there is optimism about the trade discussions,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
Technology stocks, which bore the brunt of yesterday’s slump, rose 1.05 per cent, boosted by gains in heavyweights Apple Inc and Microsoft Corp.
Tariff-sensitive industrials added 0.70 per cent, helped by a 2.5 per cent gain in the shares of Boeing co. Reuters reported the Federal Aviation Administration expects to approve Boeing’s 737 MAX jet to return to service as soon as late June.
“Investors are assessing opportunities from a value perspective especially in the tech sector where trade talks have put pressure,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.
“The trade talks are not going as smoothly as one would have liked, but there is going to be some short covering as well.”
At 9:44 am ET the Dow Jones Industrial Average was up 166.89 points, or 0.65 per cent, at 25,657.36. The S&P 500 was up 17.61 points, or 0.62 per cent, at 2,839.85 and the Nasdaq Composite was up 65.24 points, or 0.86 per cent, at 7,693.52.
Analysts said trading could be volatile and volumes were likely to be thin as market participants geared up for the Memorial day holiday on Monday.
Markets shrugged off data that showed new orders for US-made capital goods fell more than expected in April, further evidence that manufacturing and broader economy were losing steam.
The daily exchanges between the United States and China have kept investors on edge, putting the S&P 500 index on track to post its biggest monthly decline since the December sell-off. The benchmark index is now 4 per cent below its all-time high hit on May 1.
Among other stocks, Foot Locker Inc plunged 16.9 per cent, the most on the S&P, after the footwear retailer missed quarterly profit and same-store sales estimates.
Among the gainers on the S&P, Total System Services Inc jumped 11.4 per cent after Bloomberg reported Global Payments Inc has held preliminary tie-up talks with the payment solutions provider. Global Payments’ shares rose 5.9 per cent.
Autodesk Inc fell 4.7 per cent after the software maker reported quarterly earnings below expectations.
Advancing issues outnumbered decliners by a 4.95-to-1 ratio on the NYSE and by a 3.94-to-1 ratio on the Nasdaq.
The S&P index recorded 33 new 52-week highs and three new lows, while the Nasdaq recorded 18 new highs and 24 new lows. — Reuters
