NEW YORK, July 2 ― US stocks climbed yesterday, but were well off highs that sent the S&P 500 to a record, fuelled by gains in technology stocks on optimism for progress in US-China trade talks and signs of a likely reprieve for Chinese telecom company Huawei.
The United States and China agreed on Saturday to resume trade talks and US President Donald Trump also offered concessions including no new tariffs and an easing of restrictions on Huawei Technologies Co Ltd, while China agreed to make unspecified new purchases of US farm products.
Still, stocks had given up more than half of their earlier gains as enthusiasm waned and caution crept back in for investors in what is likely to be a lightly traded week due to the July Fourth holiday.
“It was kind of a relief rally but there is a lot of unanswered question here,” said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco.
“This is not going to get resolved because there was a lunch in Osaka and given how mercurial our president is, who knows what is going to throw him into a tizzy.”
Tech stocks, Wall Street's top performers so far in 2019, jumped 1.07 per cent, with heavyweight Apple Inc's 1.6 per cent gain providing the maximum support.
Chipmakers with a sizable revenue exposure to China jumped nearly 5 per cent at their session high before also pulling back, last showing a 1.99 per cent gain in the Philadelphia Semiconductor index . Huawei supplier Micron Technology Inc gained 3.3 per cent.
The Dow Jones Industrial Average rose 40.03 points, or 0.15 per cent, to 26,639.99, the S&P 500 gained 12.39 points, or 0.42 per cent, to 2,954.15 and the Nasdaq Composite added 58.70 points, or 0.73 per cent, to 8,064.95.
Stocks saw their steepest sell-off this year in May after a breakdown in the US-China trade talks sparked concerns of a global economic slowdown.
But hopes that the Federal Reserve would cut interest rates to preserve a strong run of US economic growth, and a dovish turn by central banks around the globe, helped the S&P 500 and the Dow Jones indexes post their best June performance in decades.
Despite the latest development in talks, traders still anticipate the Fed's next move will be a rate cut of at least a quarter of a percentage point at its July 30-31 policy meeting.
Data showed growth in manufacturing cooled in the United States in June while factory activity shrank across much of Europe and Asia, further supporting expectations of a rate cut.
Gains on the Dow were held in check by a 2.4 per cent drop in Boeing Co after a report that federal prosecutors had subpoenaed records relating to the production of the 787 Dreamliner in South Carolina.
Wynn Resorts Ltd jumped 6.7 per cent, the most on the S&P, as gambling revenue in the Chinese territory of Macau rose more than expected in June. Shares of peers Melco Resorts & Entertainment Ltd and Las Vegas Sands Corp also rose.
Coty Inc tumbled 14.8 per cent, falling the most on the S&P, after the company said it would overhaul its operations and write down about US$3 billion in value of its brands acquired from Procter & Gamble Co.
Advancing issues outnumbered declining ones on the NYSE by a 1.30-to-1 ratio; on Nasdaq, a 1.21-to-1 ratio favoured advancers.
The S&P 500 posted 60 new 52-week highs and two new lows; the Nasdaq Composite recorded 119 new highs and 24 new lows. ― Reuters
