Tech leads Wall Street higher as trade fears ebb

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(Reuters) – U.S. stocks ticked higher on Thursday on signs that Washington may dial back on plans for tariffs on European cars, soothing some worries about trade even as China looked set to face U.S. tariffs.

FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 28, 2018. REUTERS/Brendan McDermid

Technology stocks led the gains, with chipmakers Qualcomm, Micron and Qorvo among the top gainers. Micron said a temporary ban on some sales in China would hurt its quarterly revenue by just 1 percent.

The Philadelphia Semiconductor index rose about 1.4 percent amid a broad rally across sectors.

Washington offered to abandon threatened levies on European cars in return for concessions, with German Chancellor Angela Merkel responding by saying she would back lowering European Union tariffs on U.S. car imports.

Shares of European automakers rose, with New York-listed stock of Fiat gaining 6 percent. Ford climbed 0.5 percent and General Motors rose 1.5 percent.

The Trump administration’s tariffs on $34 billion of Chinese imports are due to go into effect at 0401 GMT on Friday and Beijing said it would respond in equal measure on U.S. goods ranging from cars to soybeans the instant U.S. measures go into effect.

Trump has threatened to escalate tariffs to as much as $450 billion worth of Chinese goods if China retaliates.

Robert Pavlik, chief investment strategist at SlateStone Wealth LLC in New York, said that there was hope in the market that leaders were still just positioning before finally coming to terms that would head off a deeper conflict.

“Trump has already said that he wants to negotiate on car tariffs, I think that’s an indication that he is negotiating to get people at the table to make acceptable resolutions for everyone,” Pavlik said.

At 9:56 a.m. EDT the Dow Jones Industrial Average was up 116.16 points, or 0.48 percent, at 24,290.98, the S&P 500 was up 12.64 points, or 0.47 percent, at 2,725.86 and the Nasdaq Composite was up 45.94 points, or 0.61 percent, at 7,548.61.

The U.S. Federal Reserve is also set to release minutes from its June 12-13 policy meeting at 2:00 p.m. ET, where it raised interest rates for a second time this year and flagged that more are likely.

The ADP National Employment Report showed private employers added 177,000 jobs in June, below Reuters’ consensus of an increase of 19,000. That comes ahead of the more comprehensive non-farm payroll report on Friday.

Advancing issues outnumbered decliners for a 1.62-to-1 ratio on the NYSE and for a 1.49-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week highs and three new lows, while the Nasdaq recorded 40 new highs and 12 new lows.

Reporting by Sruthi Shankar in Bengaluru; editing by Patrick Graham

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