Tech stocks buoy Wall Street as China-U.S. trade talk progress

By Medha Singh

(Reuters) - U.S. stocks rose for the second straight day on Tuesday, led by technology companies on signs that China and the United States were moving toward resolving their bitter trade dispute that has roiled global equities markets for months.

After a strong start, which was also boosted by healthy economic data, the three indexes pared gains to about 0.5 percent, helping the S&P 500 and Dow Jones Industrial Average cut some of their losses for the year.

U.S. and Chinese officials discussed a road map for the next stage of trade talks, while President Donald Trump said negotiations were "very productive" and an "important announcement" was imminent.

Adding to the optimism was a Bloomberg report that China is moving to cut import tariffs on U.S.-made cars to 15 percent from 40 percent, which lifted shares of General Motors Co and Ford Motor Co.

"The trade headlines help, but there is something being said for a new market structure where a lot of money is managed passively by algorithms driven accounts," said Yousef Abbasi, global market strategist at INTL FCStone in New York.

"Some of the volatility we have seen has made me question what stocks are moving on. When you see this amount of volatility, fundamentals go out the window. We will see some degree of selling into the strength."

The S&P snapped a three-day losing streak Monday as the index bounced off an eight-month low, which some strategists said was due to trading algorithms appearing to kick in with buy signals at the lows.

Technology stocks, which helped power the market's reversal Monday, rose 0.65 percent and continued to provide the biggest support.

The trade-sensitive chipmakers index jumped 1.61 percent, while industrials rose about 0.13 percent.

Pfizer Inc was down 1.67 percent after a JP Morgan downgrade. Apple Inc was off 0.28 percent, while Boeing Co reversed course to drop 0.8 percent. The three stocks curtailed gains on the indexes.

At 11:32 a.m. ET, the Dow was up 48.68 points, or 0.20 percent, at 24,471.94. The S&P 500 was up 11.89 points, or 0.45 percent, at 2,649.61 and the Nasdaq was up 50.42 points, or 0.72 percent, at 7,070.94.

The biggest gainer was the materials sector's 0.97-percent rise, while the defensive utilities sector was flat.

Alphabet Inc was up 0.43 percent as Google Chief Executive Officer Sundar Pichai started a congressional hearing saying the company currently has "no plans" to launch a search engine in China.

Data showed U.S. producer prices unexpectedly rose in November, but the overall momentum in wholesale inflation appears to be slowing.

The report comes as investors also grapple with concerns over interest rates and is ahead of the more crucial consumer price data on Wednesday.

Advancing issues outnumbered decliners by a 2.56-to-1 ratio on the NYSE and a 1.85-to-1 ratio on the Nasdaq.

The S&P index recorded nine new 52-week highs and one new lows, while the Nasdaq recorded 21 new highs and 92 new lows.

(Reporting by Medha Singh in Bengaluru; Editing by Sriraj Kalluvila)