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Wall Street climbs on easing US-China trade tensions

Also helping the mood was news that China had resumed its review of chipmaker Qualcomm’s proposed $44b takeover of NXP Semiconductor

Gulf News

New York: Wall Street indices rose on Monday, helped by gains in technology stocks after President Donald Trump softened his stance on Chinese technology company ZTE Corp, signalling easing US-China trade tensions.

Trump on Sunday pledged to help ZTE “get back into business, fast” nearly a month after the US Commerce Department banned American companies from selling to the firm for violating an agreement.

Trump’s comments came ahead of trade talks between Chinese Vice Premier Liu He and US officials this week to resolve escalating trade disputes and drove big gains in the shares of US suppliers to ZTE.

Optical components maker Acacia Communications jumped 16.1 per cent, while Oclaro and Lumentum Holdings rose 5.8 per cent and 3.6 per cent, respectively.

“Some of the headlines point to signs that Trump might be watering down his tough talks on trade,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

Also helping the mood was news that China had resumed its review of chipmaker Qualcomm’s proposed $44 billion takeover of NXP Semiconductors. NXP surged 10.3 per cent and Qualcomm 3.3 per cent.

The Philadelphia semiconductor index was up 1.9 per cent.

At 9:55am ET, the Dow Jones Industrial Average was up 120.76 points, or 0.49 per cent, at 24,951.93, the S&P 500 was up 12.45 points, or 0.46 per cent, at 2,740.17 and the Nasdaq Composite was up 43.40 points, or 0.59 per cent, at 7,446.28.

The indices posted solid gains last week, helped by a surge in oil prices, easing inflation fears and Apple’s rally that took the iPhone maker close to $1 trillion in market capitalisation.

The S&P 500 and the Dow Jones Industrial Average were trading above their 100-day moving averages, a key technical level that many traders believe is a sign that markets could gain further.

“It looks like the markets want to move up, and there seems to be a rosier outlook for geopolitics especially North Korea,” Cardillo said.

US Secretary of State Mike Pompeo said on Sunday that Washington would agree to lift sanctions on North Korea if the country agrees to completely dismantle its nuclear weapons program.

Nine of the 11 major S&P sectors were higher, with technology and energy sectors leading the gains.

Exxon rose 1.1 per cent after Citigroup raised its price target on the stock.

The biggest decliner was Xerox, which tumbled 7.9 per cent after the US photocopier giant scrapped a planned $6.1 billion deal with Fujifilm Holdings.

Advancing issues outnumbered decliners by a 2.39-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 2.04-to-1 ratio on the Nasdaq.

The S&P index recorded 21 new 52-week highs and two new lows, while the Nasdaq recorded 73 new highs and 15 new lows.