Off The Wire
Wall Street attempts rebound, with help from tech stocks
(Reuters) - U.S. stocks edged higher on Tuesday, as investors picked up beaten-down technology and industrial stocks following optimistic comments from Washington and Beijing that tempered concerns about a further escalation in the trade war.
The S&P 500 .SPX and the Dow .DJI recorded their largest percentage drops since Jan. 3 on Monday in one of Wall Street's worst selloffs this year after China hit back with tariffs on $60 billion worth U.S. goods.
U.S. President Donald Trump said on Monday he would talk to Chinese President Xi Jinping at a G20 Summit in late June and China said both sides have agreed to keep the talks going, helping inject some calm into the markets.
“Investors are trying to scoop up bargains. Maybe things have gotten a little bit too far overdone to the downside,” said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.
“As long as the two sides are talking, the tariffs itself become background noise.”
Technology shares .SPLRCT, which posted their biggest percentage drop in more than four months in the previous session rose 0.92% and boosted markets. The sector was lifted by shares of iPhone maker Apple Inc (AAPL.O), Microsoft Corp (MSFT.O) and chipmakers, all of which took a hard hit on Monday as they rely on China for a large part of their revenue.
Prospects of the global economy being derailed by the United States and China sliding into a fiercer, more protracted dispute has knocked more than 4% off the S&P 500 since hitting an all-time high on May 1, putting the index on course for the biggest monthly decline since December.
At 10:07 a.m. ET the Dow Jones Industrial Average .DJI was up 132.85 points, or 0.52%, at 25,457.84, the S&P 500 .SPX was up 15.15 points, or 0.54%, at 2,827.02 and the Nasdaq Composite .IXIC was up 39.93 points, or 0.52%, at 7,686.96.
A Labor Department report showed U.S. import prices rose less than expected in April as increases in the cost of petroleum and food were tempered by the largest drop in the price of capital goods in 10 years, suggesting inflation could remain tame for a while.
Data showed import prices increased 0.2% last month, while economists polled by Reuters had forecast a 0.7% rise.
Federal Reserve’s New York chief John Williams, a voter in the interest rate setting committee this year, said on Tuesday the recent U.S. tariffs imposed on Chinese goods will boost U.S. inflation and could dampen economic growth.
Nine of the 11 major S&P sectors were higher, led by a 1.1% gain in energy stocks .SPNY as oil prices rose. [O/R]
Coca-Cola Co’s shares (KO.N) rose 2.2% after Morgan Stanley upgraded the stock to “overweight”, saying higher growth has not been priced into the stock’s valuation.
Boeing Co shares (BA.N) were up 0.8% ahead of April deliveries report, expected later in the day.
Advancing issues outnumbered decliners for a 2.18-to-1 ratio on the NYSE and a 1.92-to-1 ratio on the Nasdaq. The S&P index recorded 11 new 52-week highs and three new lows, while the Nasdaq recorded 20 new highs and 45 new lows.
Reporting by Sruthi Shankar and Amy Caren Daniel in Bengaluru; Editing by Arun Koyyur and Shounak Dasgupta