U.S. stocks climbed on Tuesday as investor
concerns about rising trade tensions between the United States and China eased
after Chinese President Xi Jinping promised to cut import tariffs.
The technology sector which would be
particularly exposed to a negative impact from tense trade relations with
China, provided the biggest boost to the S&P 500.
Xi said China will widen market access for
foreign investors, a point of contention for U.S. President Donald Trump’s
His comments buoyed global markets, which have
been under pressure as China and the United States threatened each other with
billions of dollars in tariffs.
“With (Xi’s comments), we got the signal for
‘risk on’ in trading today,” said Mariann Montagne, portfolio manager at
Gradient Investments in Arden Hills, Minnesota. “That’s why we’ve seen tech and
biotech performing very strongly today.”
Facebook shares added the most gains to the
S&P 500, rising 4.5 percent after Chief Executive Mark Zuckerberg began his
testimony before Congress and took questions from lawmakers. It was the biggest
one-day percentage gain for the stock in nearly two years.
Zuckerberg’s testimony aimed to strike a
conciliatory tone in an attempt to blunt possible regulatory fallout from the
privacy scandal engulfing his social network.
The energy index had the highest percentage
gain among the S&P’s 11 major sectors, adding 3.3 percent as oil broke
above $70 a barrel.
The Dow Jones Industrial Average rose 428.9 points, or 1.79
percent, to 24,408, the S&P 500 gained 43.71 points, or 1.67 percent,
to 2,656.87 and the Nasdaq Composite added 143.96 points, or 2.07 percent,
Only utilities and real estate which are
sensitive to interest rates, posted losses after U.S. producer prices rose more
than expected in March, indicating that inflation is strengthening, which could
push interest rates up further.
However, the increase in producer prices did
not prompt broader concerns about future market performance.
“It’s not enough to offset better expectations
about the overall economy,” said Kate Warne, investment strategist at Edward
Jones in St. Louis.
U.S. stocks will face a major test in coming weeks as
first-quarter earnings pour in. JPMorgan Chase, Citigroup and Wells Fargo will
kick off the earnings season on Friday.
Analysts expect quarterly profits for S&P
500 companies to rise 18.5 percent from a year ago, which would be the biggest
gain in seven years, according to Thomson Reuters I/B/E/S.
Sprint Corp shares jumped 17.1 percent after
reports that the company had restarted merger talks with T-Mobile US Inc.
T-Mobile shares rose 5.7 percent.
Advancing issues outnumbered declining ones on
the NYSE by a 3.16-to-1 ratio; on Nasdaq, a 3.93-to-1 ratio favored advancers.
The S&P 500 posted six new 52-week highs
and one new low; the Nasdaq Composite recorded 53 new highs and 32 new lows.
Volume so far on U.S. exchanges was 7.14
billion shares, compared with the 7.33 billion-share average for the full
session over the last 20 trading days.
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