NEW YORK, Aug 7 ― US stocks rose yesterday as China stepped in to stabilise the yuan, soothing concerns that currencies would be the latest weapon in the long-drawn trade war, a day after Wall Street suffered their sharpest one-day percentage drops of the year.

China's overnight intervention came after the US Treasury Department labelled Beijing as a currency manipulator as it let the yuan slide to a more than decade low on Monday.

A steep fall in the Chinese currency had led the benchmark S&P 500 and Nasdaq record their sixth straight session of declines, losing at least 3 per cent each in the previous session.

China's move to fix the yuan at a slightly stronger rate and White House economic adviser Larry Kudlow's comment that President Donald Trump was planning to host a Chinese delegation for further talks in September allayed fears of a further escalation in trade war.

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The S&P 500, still reeling from last week's shock when President Donald Trump vowed to slap a 10 per cent tariff on a further US$300 billion (RM1.25 trillion) in Chinese imports, is 5.6 per cent away from its all-time high hit last month.

“Both sides are at that point where they must go back and renegotiate,” said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.

“Yesterday's big drop off has allowed bargain hunters to find bargains.”

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The technology sector, which includes companies that have a big exposure to China and were at the heart of Monday's selloff, rose 0.68 per cent.

Apple Inc gained 0.8 per cent after three days of heavy losses, while Philadelphia Semiconductor index edged 0.40 per cent higher.

At 12.55pm ET, the Dow Jones Industrial Average was up 61.05 points, or 0.24 per cent, at 25,778.79, the S&P 500 was up 9.12 points, or 0.32 per cent, at 2,853.86. The Nasdaq Composite was up 32.53 points, or 0.42 per cent, at 7,758.57.

Among other stocks, Take-Two Interactive Software Inc jumped 9.5 per cent after the videogame publisher raised its full-year revenue forecast.

The materials sector dropped 1 per cent, weighed by a more than 13 per cent fall in scent and flavour maker International Flavors & Fragrances and fertiliser company Mosaic Co after the two companies cut their full-year earnings forecasts.

Payments processor Mastercard Inc gained 2.1 per cent after it said it would buy a majority of the corporate services businesses of Scandinavian payments group Nets for about US$3.19 billion.

Walt Disney Co was up 0.8 per cent ahead of its results after market close.

Advancing issues outnumbered decliners by a 1.20-to-1 ratio on the NYSE and by a 1.03-to-1 ratio on the Nasdaq.

The S&P index recorded two new 52-week highs and 23 new lows, while the Nasdaq recorded 17 new highs and 166 new lows. ― Reuters