Wall Street forges higher on China-US trade truce cheer
May 22, 2018 06:31 AM GMT+0530 | 0 Comment(s)
AFP - Wall Street started the week with a rally on Monday, sending stocks higher as investors heaved a sigh of relief that Washington and Beijing had decided to step back from a possible trade war.
The good spirits came from the Trump administration's pledge to put its trade dispute with China "on hold" after both sides reached a consensus to reduce the soaring US trade dispute with China -- though observers said the details were sketchy.
The benchmark Dow Jones Industrial Average finished up nearly 300 points, adding 1.2 percent to close at 25,013.36.
The broader S&P 500 rose 0.7 percent to 2,733.02 and the Nasdaq gained 0.5 percent to hit 7,394.04.
Industrial stocks that had been most vulnerable to the prospect of a trade war -- meaning higher input costs from tariffs and reduced sales from Chinese retaliation -- lifted the Dow.
Aircraft giant Boeing jumped 3.6 percent, while conglomerate United Technologies added 2.3 percent and Caterpillar gained two percent.
Small cap index Russell 2000, in which investors had taken refuge last week, seeing it as insulated from trade shocks, hit its fourth straight record in a row, closing at 1,636.53, up 0.6 percent.
"We don't really know the details of this agreement," Peter Cardillo of Spartan Capital told AFP, "but the market is very sensitive to the trade war threat and investors think the negotiations seem to be going in the right direction."
General Electric gained 0.3 percent announcing it would merge its transport business with the rail transport business Wabtec in an $11.1 billion deal.
Fifth Third Bancorp fell nearly eight percent on plans to acquire regional lender MB Financial, which itself gained nearly 13 percent.
Semiconductor firm Micron Technology, which was holding its annual investor day on Monday, won 3.9 percent after upping its third-quarter earnings guidance.
Among those unable to celebrate the apparent trade truce were metal stocks that had stood to gain from reduced Chinese imports: AK Steel fell 5.1 percent and US Steel sank 3.8 percent.