Wall Street rises but pares gains late after report of FBI raid

Traders work on the floor of the New York Stock Exchange shortly after the opening bell February 22, 2018. — Reuters pic
Traders work on the floor of the New York Stock Exchange shortly after the opening bell February 22, 2018. — Reuters pic

NEW YORK, April 10 — Wall Street's major indexes rose yesterday as a softer stance by US policymakers on China tariffs powered a rebound from last week's selloff, but stocks pared much of their gains late in the session after a report that the Federal Bureau of Investigation raided the office of President Donald Trump's lawyer.

Technology and health stocks led the benchmark S&P 500's major sectors. Merck & Co Inc was the biggest boost to the Dow, while gains in Apple shares led the Nasdaq index.

Stocks climbed after Trump's new economic adviser Larry Kudlow told CNBC that the president may be open to forming an international coalition to grapple with trade issues involving China.

Investors will look for further signs of China's stance on trade relations when Chinese President Xi Jinping speaks at the Boao Forum economic conference today.

But stocks began paring gains late in the afternoon, a downward trend that accelerated after a report that the FBI had raided the New York office of Michael Cohen, Trump's personal lawyer, upon a referral by Special Counsel Robert Mueller.

“Even if it ultimately ends up being nothing, the initial reaction is almost always negative in the market,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

Investors are looking forward to the start of earnings season to provide a sustained lift to US stocks, with big banks, such as JPMorgan Chase, Citigroup and Wells Fargo, set to report first-quarter results on Friday.

Analysts expect quarterly profits for S&P 500 companies to rise 18.5 per cent from a year ago, which would be the biggest gain in seven years, according to Thomson Reuters I/B/E/S.

The Dow Jones Industrial Average rose 46.34 points, or 0.19 per cent, to 23,979.10, the S&P 500 gained 8.69 points, or 0.33 per cent, to 2,613.16 and the Nasdaq Composite added 35.23 points, or 0.51 per cent, to 6,950.34. AveXis Inc rose 81.6 per cent after Swiss drugmaker Novartis offered to buy the gene therapy company for US$8.7 billion (RM33.6 billion).

Merck shares rose 5.2 per cent after the drugmaker's blockbuster cancer drug, Keytruda, met the main study goal of helping previously untreated lung cancer patients live longer.

Shares of Leucadia National Corp jumped 11.6 per cent after the company said it would sell most of its non-financial assets to focus on investment banking and advisory services.

Declining issues outnumbered advancing ones on the NYSE by a 1.10-to-1 ratio; on Nasdaq, a 1.13-to-1 ratio favoured advancers.

Volume on US exchanges was 6.28 billion shares, compared to the 7.3 billion average for the full session over the last 20 trading days. — Reuters

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