S&P, Nasdaq up 1% as North Korea tensions wane

The S&P 500 and the Nasdaq Composite rose about 1 per cent in early afternoon trading on Monday as investors returned to riskier assets after tensions eased between the United States and North Korea.

Gains were broad-based, with the S&P financial sector rising 1.60 per cent and the technology index 1.39 per cent, putting the S&P index on track for its biggest single-day percentage gain in nearly four months.

The Dow and the Nasdaq were also on course to mark their best day in about two months.

Investor sentiment got a boost after key US officials on Sunday played down the risk of an imminent war with North Korea, which had wiped out nearly $1 trillion from global equity markets last week.

"It seems like tensions may have de-escalated between North Korea and the United States that had been weighing on the markets last week," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

At 12.45 pm ET (1645 GMT), the Dow Jones Industrial Average was up 143.89 points, or 0.66 per cent, at 22,002.21, the S&P 500 was up 24.19 points, or 0.99 per cent, at 2,465.51.

The Nasdaq Composite was up 75.78 points, or 1.21 per cent, at 6,332.33.

Safe-haven gold, which hit two-month highs last week, dropped by half a per cent, under pressure from a strengthening dollar.

Oil slipped as a slowdown in Chinese refining raised concerns about demand in the world's second-biggest consumer. "We're going to get some more information on retailers this week. So that is going to return to driving the markets," Forrest said.

Retail giants Wal-Mart and Target are scheduled to report earnings this week.

Among stocks, Tesla rose 1.83 percent after two brokerages raised their price targets on the stock, citing the potential success of the company's Model 3 sedan.

JD.com, China's second-largest e-commerce firm, was off 3.62 per cent after reporting a bigger loss due to higher marketing costs.

Alibaba was up about 1.35 per cent after Dan Loeb's Third Point bought 4.5 million shares in the Chinese e-commerce giant.

Advancing issues outnumbered decliners on the NYSE by 2,362 to 521. On the Nasdaq, 2,181 issues rose and 671 fell.