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Wall Street pares gains as defensive stocks offset trade optimism

Reuters  |  NEW YORK 

By Stephen Culp

NEW YORK (Reuters) - Wall Street edged higher after pulling back from stronger gains on Monday as weakness in defensive stocks offset trade optimism after U.S. Donald Trump's conciliatory remarks toward China's indicated easing U.S.-trade tensions.

The <.SPX> briefly crossed into negative territory after hitting a roughly two-month high earlier in the session, but was back on track for its fourth straight day of gains.

On Sunday, Trump vowed to help 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 came as high-level trade talks between the world's two largest economies were due to resume this week after Washington's tough stance on trade and tariffs put the countries on track for a potential trade war.

"It seems like there's a little less concern about a trade war with given some of the overtures that Trump made," said Chuck Carlson, at in Hammond, "They're hoping for a dying down of the trade war rhetoric and, quite frankly, they're probably looking for some successful deals (to be) made."

At 2:44PM ET, the <.DJI> rose 69.95 points, or 0.28 percent, to 24,901.12, the <.SPX> gained 1.89 points, or 0.07 percent, to 2,729.61 and the <.IXIC> added 11.69 points, or 0.16 percent, to 7,414.57.

With 91 percent of companies having reported first-quarter results, earnings were on track to have climbed 26.1 percent, according to data.

"It was expected to be good and it was good," Carlson said. "The issue ... that the market's still grappling with is are these earnings creating such a high hurdle for future earnings."

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

U.S. optical component maker stocks received a boost from the ZTE news, with up 9.1 percent and and advancing 4.5 percent and 2.3 percent, respectively.

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

shares tumbled 5.4 percent after abandoning a planned $6.1 billion deal with <4901.T>.

Shares of were down 7.0 percent after sued to stop controlling shareholder from continuing with her plan to merge it with Viacom. CBS rose 3.2 percent.

Declining issues outnumbered advancing ones on the NYSE by a 1.02-to-1 ratio; on Nasdaq, a 1.08-to-1 ratio favored decliners.

(Reporting by Stephen Culp; editing by Jonathan Oatis)

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

First Published: Tue, May 15 2018. 00:48 IST