Tech stocks lead rally on Wall Street after Huawei breather
U.S. stocks rose on Tuesday, lifted by a rebound in technology stocks, as Washington’s move to temporarily ease curbs on China’s Huawei Technologies calmed nerves over a further worsening of a trade war between the two countries.
Chipmakers, which bore the brunt of Monday’s sell-off, rose after the United States granted the Chinese telecoms equipment maker a license to buy U.S. goods until Aug. 19.
The Philadelphia Semiconductor Index gained 2.27per cent and was on track to end a three-day slump. Shares of Huawei suppliers such as Intel Corp, Qualcomm Inc, Xilinx Inc and Broadcom Inc rose between 2.4per cent and 4per cent.
The broader S&P 500 technology sector rose 1.33per cent, the most among the 10 major S&P sectors trading higher.
“The latest news on Huawei shows that there is still room for trade negotiations with China,” said Aaron Clark, portfolio manager at GW&K Investment Management.
“Technology stocks have been at the forefront of trade-related news and particularly semiconductors have faced some pain points, more so than others.”
U.S. President Donald Trump added Huawei to a trade blacklist last week, leading several companies to suspend business with the world’s largest telecom equipment maker and triggering fears of a rippling effect on the global technology sector.
Reuters reported on Sunday that Alphabet Inc’s Google would stop providing Huawei access to its proprietary apps and services. But Huawei said on Tuesday it was working closely with the U.S. company to resolve the restrictions.
The S&P 500 index is now 3per cent away from its all-time high scaled earlier in May, hit by recent selling pressure on mounting concerns about a prolonged U.S.-China trade war. Still, the benchmark index is set to post its worst monthly decline this year.
At 11:09 a.m. ET, the Dow Jones Industrial Average was up 155.07 points, or 0.60per cent, at 25,834.97. The S&P 500 was up 24.02 points, or 0.85per cent, at 2,864.25 and the Nasdaq Composite was up 83.46 points, or 1.08per cent, at 7,785.84.
The defensive consumer staples was the only major S&P sector trading lower, down 0.16per cent.
Investors also largely shrugged off disappointing results from a handful of retailers.
Kohl’s Corp plunged 11per cent, the most among S&P 500 companies, after the department store operator cut its full-year profit forecast and reported quarterly same-store sales and profit that missed expectations.
Rival J.C. Penney Co Inc fell 9.1per cent after the company reported a bigger-than-expected fall in quarterly comparable-store sales.
Home Depot Inc shares dipped 0.1per cent after the home improvement chain reported its slowest growth in quarterly same-store sales in at least three years.
With over 460 of S&P 500 companies having posted first-quarter results, 75.2per cent have topped analysts’ profit expectations. Analysts now expect first-quarter earnings growth of 1.4per cent, a sharp turnaround from the 2per cent loss expected on April 1, according to Refinitiv data.
Advancing issues outnumbered decliners by a 4.31-to-1 ratio on the NYSE and by a 2.91-to-1 ratio on the Nasdaq.
The S&P index recorded 26 new 52-week highs and four new lows, while the Nasdaq recorded 41 new highs and 46 new lows.