(Reuters) – Wall Street’s main indexes rose over 1 percent on Tuesday, in a broad-based rally fueled by a tentative deal reached by American lawmakers to avoid another partial government shutdown and hopes that the U.S.-China trade talks could result in an agreement.
A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., February 8, 2019. REUTERS/Brendan McDermid
It was unclear, however, if President Donald Trump would accept the deal as congressional aides said it did not contain the $5.7 billion he wants for a border wall.
“Even though Trump hasn’t settled on a deal, the way investors are looking at it is that this is more positive than what we had on Monday,” said Randy Hare, director of equity research at Huntington Private Bank in Cincinnati, Ohio.
“The news on trade right now may not be as strong but it is still being viewed as a positive.”
Trade talks resumed on Monday and U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer arrived in Beijing on Tuesday, ahead of high-level talks scheduled later this week.
The world’s two biggest economies are seeking to strike a deal before a March 1 deadline, when additional U.S. tariffs on Chinese imports will come into force.
Trade-sensitive industrials climbed 1.3 percent, boosted by Boeing Inc, Caterpillar Inc and 3M Co.
Chipmakers, which depend on China for a huge chunk of their revenue, also rose and pushed the Philadelphia chip index 1.86 percent higher.
The broader technology sector rose 1.19 percent, lifted by gains in Apple Inc, Microsoft Corp and Intel Corp.
The S&P 500 index is just about 7 percent away from its Sept. 20 record closing high, driven by optimism on trade, a largely upbeat fourth-quarter earnings season and a dovish Federal Reserve.
About 71 percent of the S&P companies that have posted earnings have topped expectations, according to IBES data from Refinitiv. But analysts’ estimates for first-quarter earnings have turned negative for the first time since 2016.
At 11:06 a.m. ET, the Dow Jones Industrial Average was up 278.90 points, or 1.11 percent, at 25,332.01. The S&P 500 was up 29.53 points, or 1.09 percent, at 2,739.33 and the Nasdaq Composite was up 96.78 points, or 1.32 percent, at 7,404.68.
Seven of the 10 major sectors trading higher posted gains of more than 1 percent, with the financial group’s 1.49 percent rise the steepest, supported by higher bond yields.
Only the real estate sector was trading lower.
Cosmetics maker Coty Inc surged 14.4 percent, the most on the S&P, after German conglomerate JAB Holding Co said it planned to hike its stake.
Electronic Arts Inc jumped 3.4 percent after the videogame maker’s newly launched battle royale game gained traction. Rival Take-Two lost 5.2 percent following a downgrade by a 5-star analyst.
Advancing issues outnumbered decliners by a 3.63-to-1 ratio on the NYSE and by a 3.56-to-1 ratio on the Nasdaq.
The S&P index recorded 31 new 52-week highs and one new low, while the Nasdaq recorded 56 new highs and seven new lows.
Reporting by Amy Caren Daniel and Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila