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U.S.-China trade truce boosts Wall Street

Reuters 

By Lewis Krauskopf

(Reuters) - Wall Street's major indexes rallied on Monday following a trade truce between the and China, whose tensions have clouded the outlook for the for much of the year.

The benchmark S&P 500 <.SPX> gained nearly 1 percent, building off of its biggest weekly percentage gain in nearly seven years a week ago, although the index had come off its earlier session highs in afternoon trading.

Investors were lifted by over the weekend that U.S. and Chinese agreed to hold off on new tariffs during talks in Argentina, 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 the some of the worst-case scenarios regarding their trade relations," said Michael Arone, at

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

"We still have a long way to go to have what is an agreed-upon trading relationship between the U.S. and China, so I think that is a little bit of the pullback from the highs of the day as that settles in with investors," Arone said.

The <.DJI> rose 232.91 points, or 0.91 percent, to 25,771.37, the S&P 500 <.SPX> gained 23.68 points, or 0.86 percent, to 2,783.85 and the <.IXIC> added 86.92 points, or 1.19 percent, to 7,417.46.

Last week, the S&P 500 gained 4.8 percent, rebounding after confirming its second 10 percent correction of the year, as investors interpreted commentary from the Federal Reserve as signalling that U.S. interest rate hikes may be less aggressive than feared.

On Monday, the technology sector <.SPLRCT>, among the groups seen as sensitive to trade tensions, gained 1.7 percent. shares, recently hit by worries over possible tariffs on iPhones, gained 2.3 percent.

Shares of and , two industrial companies viewed as trade bellwethers, gained 3.5 percent and 2.3 percent, respectively, and gave a lift to the blue-chip Dow. The industrial sector <.SPLRCI> rose 1.2 percent.

rose 2.0 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 58.7 percent after agreed to buy the for $5.1 billion.

Advancing issues outnumbered declining ones on the NYSE by a 2.38-to-1 ratio; on Nasdaq, a 1.48-to-1 ratio favoured advancers.

The S&P 500 posted 38 new 52-week highs and no new lows; the recorded 68 new highs and 61 new lows.

(Additional reporting by in Bengaluru; Editing by and Jonathan Oatis)

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

First Published: Tue, December 04 2018. 01:12 IST
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