(Reuters) – U.S. stocks rose on Tuesday as technology stocks rebounded and a report said the United States and China were trying to restart negotiations to defuse a trade war between world’s two largest economies.
Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., July 27, 2018. REUTERS/Lucas Jackson
Representatives of U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are having private conversations as they look for ways to reengage in negotiations, Bloomberg reported, citing two people familiar with the effort.
The escalating trade dispute between the two countries, with the United States and China imposing tariffs on $34 billion of each other’s goods earlier this month, has weighed heavily on the equity markets.
The likelihood of a respite in the tensions boosted the markets on Tuesday, with nine of the 11 major S&P sectors higher.
The gains were led by the trade-sensitive industrial sector .SPLRCI, which gained 1.31 percent. Boeing (BA.N) and Caterpillar (CAT.N) jumped more than 1 percent, while 3M (MMM.N) rose more than 2 percent.
Also boosting the market was a rebound in technology stocks, which lost 5.3 percent in the past three days as lackluster earnings sparked concerns about their future growth.
The tech sector .SPLRCT, which had led the equity market to record highs, was up 0.2 percent. Microsoft (MSFT.O) rose 0.5 percent and was the biggest boost to the S&P 500 and the Nasdaq.
The so-called FAANG stocks — Facebook (FB.O), Apple (AAPL.O), Amazon.com (AMZN.O), Netflix (NFLX.O) and Google parent Alphabet (GOOGL.O) — were little changed. Apple is due to report results after the bell.
“It’s a technical reaction, as technology stocks have sold off quite sharply,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“If you have several days of declines, you have some bargain hunting coming in and that’s what is temporarily halting the fall.”
At 9:58 a.m. EDT the Dow Jones Industrial Average .DJI was up 90.09 points, or 0.36 percent, at 25,396.92, the S&P 500 .SPX was up 8.91 points, or 0.32 percent, at 2,811.51 and the Nasdaq Composite .IXIC was up 22.19 points, or 0.29 percent, at 7,652.19.
Economic data was also healthy, with the Commerce Department reporting consumer spending jumped in June, building a strong base for the economy heading into the third quarter, while inflation rose moderately.
The year-on-year increase in the so-called core personal consumption expenditures (PCE) was at 1.9 percent for a third straight month, a shade below the Federal Reserve’s 2 percent inflation target.
The Fed’s two-day meeting starts later in the day and the central bank is expected to leave interest rates unchanged after increasing borrowing costs in June for the second time this year. The Fed has forecast two more rate hikes by December.
Among stocks, Pfizer’s (PFE.N) shares dipped 0.9 percent after the drugmaker lowered its full-year revenue forecast due to the strong dollar.
Chipotle Mexican Grill (CMG.N) slipped 4.9 percent after the burrito chain operator shut a restaurant in Ohio following reports of customers getting severely ill.
Advancing issues outnumbered decliners for a 1.78-to-1 ratio on the NYSE and a 1.41-to-1 ratio on the Nasdaq.
The S&P index recorded nine new 52-week highs and one new low, while the Nasdaq recorded 13 new highs and 36 new lows.
Reporting by Amy Caren Daniel in Bengaluru; Editing by Shounak Dasgupta