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Relief rally boosts Wall Street on U.S.-China trade truce


By Lewis Krauskopf

(Reuters) - Wall Street's major indexes rallied on Monday following a truce between the and in their trade dispute, which has clouded the outlook for the for much of the year.

The benchmark S&P 500 <.SPX> climbed more than 1 percent, building off of its biggest weekly percentage gain in nearly seven years a week ago.

Investors were lifted by over the weekend that U.S. and Chinese agreed during talks in to hold off on new tariffs for 90 days, declaring a truce following months of escalating tensions on trade and other issues.

"Today is mostly about celebrating the fact that the U.S. and have delayed what could have been some of the worst-case scenarios regarding their trade relations," said Michael Arone, at

Still, major indexes closed below their highs from earlier in the session.

Arone noted that "there are still some very sticky issues that need to be resolved" between the world's two biggest economies.

Keith Lerner, at in Atlanta, called it a "bit of a relief rally."

"The reason why you are not seeing more, why the market has probably come off the highs, is after the dust settles, people realize there are still a lot of question marks and it's only 90 days for them to negotiate," he said.

The <.DJI> rose 287.97 points, or 1.13 percent, to 25,826.43, the S&P 500 <.SPX> gained 30.2 points, or 1.09 percent, to 2,790.37 and the <.IXIC> added 110.98 points, or 1.51 percent, to 7,441.51.

Last week, the S&P 500 gained 4.8 percent as investors interpreted commentary from the Federal Reserve as signalling that U.S. interest rate hikes may be less aggressive than feared. The index rebounded after confirming its second 10 percent correction of the year, and is now up 4.4 percent in 2018.

On Monday, the technology sector <.SPLRCT>, among the groups seen as sensitive to trade tensions, gained 2.1 percent. shares, recently hit by worries over possible tariffs on iPhones, gained 3.5 percent.

Shares of and , two industrial companies viewed as trade bellwethers, gained 3.8 percent and 2.4 percent, respectively, and gave a lift to the blue-chip Dow. The industrial sector <.SPLRCI> rose 1.2 percent.

rose 2.3 percent as prices bounced back from their recent swoon. Along with the U.S.-trade detente, got support as Canada's province ordered a production cut, while group OPEC looked set to reduce supply.

In corporate news, shares of soared 58.5 percent after agreed to buy the for $5.1 billion.

shares rose 11.7 percent after said it agreed to buy its Chicago-based peer for about $4.1 billion, making it the largest regional U.S. TV Nexstar shares rose 6.9 percent.

Advancing issues outnumbered declining ones on the NYSE by a 2.96-to-1 ratio; on Nasdaq, a 1.88-to-1 ratio favoured advancers.

The S&P 500 posted 44 new 52-week highs and 1 new low; the recorded 73 new highs and 81 new lows.

About 8.4 billion shares changed hands in U.S. exchanges, above the 7.6 billion daily average over the last 20 sessions.

(Additional reporting by in Bengaluru; Editing by Shounak Dasgupta, and Dan Grebler)

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

First Published: Tue, December 04 2018. 03:06 IST