Tech stocks pull Wall Street higher as US eases Huawei restrictions
REUTERS: Technology stocks fueled a rebound on Wall Street on Tuesday after the United States temporarily eased curbs on China’s Huawei Technologies, raising expectations that the two countries would work toward a trade deal.
Chipmakers, which bore the brunt of Monday’s sell-off, rose after the United States granted the Chinese telecoms equipment maker a license to buy U.S. goods until Aug. 19.
The Philadelphia Semiconductor Index gained 2.09per cent and was on track to end a three-day slump. Shares of Huawei suppliers such as Intel Corp, Qualcomm Inc, Xilinx Inc and Broadcom Inc rose between 1per cent and 3.5per cent.
The broader S&P 500 technology sector rose 1.21per cent, the most among the 10 major S&P sectors trading higher.
“It was a positive move on behalf of the Trump administration because at certain point we do need a trade agreement and it shows that they are still focused on getting a deal done,” said John Traynor, chief investment officer at People’s United Wealth Management.
“But getting through this really needs to happen very quickly because it is slowing business investment.”
U.S. President Donald Trump added Huawei to a trade blacklist last week, leading several companies to suspend business with the world’s largest telecom equipment maker, raising concerns about the impact on earnings for technology companies.
The S&P 500 index is now 3per cent away from its all-time high scaled earlier in May, hit by recent selling pressure on mounting concerns about a prolonged U.S.-China trade war. The benchmark index is set to post its worst monthly decline this year.
At 12:58 p.m. ET, the Dow Jones Industrial Average was up 153.25 points, or 0.60per cent, at 25,833.15. The S&P 500 was up 24.13 points, or 0.85per cent, at 2,864.36 and the Nasdaq Composite was up 83.99 points, or 1.09per cent, at 7,786.37.
The defensive consumer staples was the only major S&P sector trading lower, down 0.21per cent.
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Investors also largely shrugged off disappointing results from a handful of retailers.
Kohl’s Corp plunged 8.9per cent, the most among S&P 500 companies, after the department store operator cut its full-year profit forecast and reported quarterly same-store sales and profit that missed expectations.
Rival J.C. Penney Co Inc fell 7per cent after the company reported a bigger-than-expected fall in quarterly comparable-store sales.
With over 460 of S&P 500 companies having posted first-quarter results, 75.2per cent have topped analysts’ profit expectations. Analysts now expect first-quarter earnings growth of 1.4per cent, a sharp turnaround from the 2per cent loss expected on April 1, according to Refinitiv data.
Advancing issues outnumbered decliners by a 3.53-to-1 ratio on the NYSE and a 2.58-to-1 ratio on the Nasdaq.
The S&P index recorded 36 new 52-week highs and four new lows, while the Nasdaq recorded 48 new highs and 62 new lows.
(Reporting by Shreyashi Sanyal and Sruthi Shankar in Bengaluru; Editing by Arun Koyyur and Sriraj Kalluvila)