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Wall Street ekes out gains as trade optimism pressured by defensive stocks

Reuters  |  NEW YORK 

By Stephen Culp

NEW YORK (Reuters) - Wall Street ended a choppy session slightly higher on Monday as weakness in defensive stocks offset optimism following U.S. Donald Trump's conciliatory remarks toward China's that calmed the waters of U.S.-China trade tensions.

The <.SPX> pared its gains after hitting a roughly two-month high earlier in the session, but at closing bell the index held onto its four-day winning streak.

Trump vowed on Sunday to help China-based communications firm ZTE <000063.SZ> "get back into business, fast" nearly a month after the Commerce Department implemented a ban on U.S. companies selling to the company.

Trump's reversal arrived on the cusp of high-level talks between the world's two largest economies, due to resume this week after back-and-forth rhetoric between the countries stoked fears that retaliatory tariffs could be imposed.

"Hopefully they can strike some deals that are amenable to both countries but also keep the economies on the rails and not force a trade war," said Chuck Carlson, at in Hammond,

The <.DJI> rose 68.24 points, or 0.27 percent, to 24,899.41, the <.SPX> gained 2.41 points, or 0.09 percent, to 2,730.13 and the Composite <.IXIC> added 8.43 points, or 0.11 percent, to 7,411.32.

With 91 percent of companies having reported first-quarter results, earnings were on pace for a 26.1 percent increase, according to data.

"I think the issue is not so much are the earnings that are being reported today going to be good," Carlson said. "It's almost like: Are they going to be too good? Are they setting up difficult comparisons 12 months hence, and how is the market going to respond to that?"

Of the 11 major sectors in the S&P 500, defensive utilities <.SPLRCU>, telecoms <.SPLRCL> and real estate <.SPLRCR> stocks were the biggest percentage losers.

saw the largest gains after the unveiled its drug price proposals.

Meanwhile, companies advanced as rose following an OPEC report that the global had been all but eliminated.

Smaller-sized U.S. stocks are outperforming the heavyweights; while the <.RUT> slipped 0.2 percent, earlier in the session it came within less than two points of its previous record high.

Gaming company stocks jumped as the paved the way for states to legalize sports betting. Casino and posted a record high, last up 4.7 percent. , and gained 5.5 percent and 2.6 percent, respectively.

U.S. optical component maker stocks received a boost from the ZTE news, with up 8.7 percent. and advanced 2.9 percent and 2.2 percent, respectively.

Shares of defense contractors such as , and Northrop Grumman Corp weighed on the markets as investors pointed to easing geopolitical tensions.

shares slid 4.3 percent after abandoning a planned $6.1 billion deal with <4901.T>.

Shares of dropped 4.9 percent after sued to stop controlling shareholder Shari Redstone's planned merger with Viacom. CBS was up 2.0 percent.

Declining issues outnumbered advancing ones on the NYSE by a 1.12-to-1 ratio; on Nasdaq, a 1.19-to-1 ratio favored decliners.

The S&P 500 posted 24 new 52-week highs and 2 new lows; the Composite recorded 114 new highs and 34 new lows.

Volume on U.S. exchanges was 5.96 billion shares, compared to the 6.65 billion average for the full session over the last 20 trading days.

(Reporting by Stephen Culp; editing by and Cynthia Osterman)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, May 15 2018. 02:25 IST