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US: Wall Street forges higher on China-US trade truce cheer
[NEW YORK] Wall Street started the week with a rally on Monday, sending stocks higher as investors heaved a sigh of relief that Washington and Beijing had decided to step back from a possible trade war.
The good spirits came from the Trump administration's pledge to put its trade dispute with China "on hold" after both sides reached a consensus to reduce the soaring US trade dispute with China - though observers said the details were sketchy.
The benchmark Dow Jones Industrial Average finished up nearly 300 points, adding 1.2 per cent to close at 25,013.36.
The broader S&P 500 rose 0.7 per cent to 2,733.02 and the Nasdaq gained 0.5 per cent to hit 7,394.04.
Industrial stocks that had been most vulnerable to the prospect of a trade war - meaning higher input costs from tariffs and reduced sales from Chinese retaliation - lifted the Dow.
Aircraft giant Boeing jumped 3.6 per cent, while conglomerate United Technologies added 2.3 per cent and Caterpillar gained two per cent.
Small cap index Russell 2000, in which investors had taken refuge last week, seeing it as insulated from trade shocks, hit its fourth straight record in a row, closing at 1,636.53, up 0.6 per cent.
"We don't really know the details of this agreement," Peter Cardillo of Spartan Capital told AFP, "but the market is very sensitive to the trade war threat and investors think the negotiations seem to be going in the right direction."
General Electric gained 0.3 per cent announcing it would merge its transport business with the rail transport business Wabtec in an US$11.1 billion deal.
Fifth Third Bancorp fell nearly eight per cent on plans to acquire regional lender MB Financial, which itself gained nearly 13 per cent.
Semiconductor firm Micron Technology, which was holding its annual investor day on Monday, won 3.9 per cent after upping its third-quarter earnings guidance.
Among those unable to celebrate the apparent trade truce were metal stocks that had stood to gain from reduced Chinese imports: AK Steel fell 5.1 per cent and US Steel sank 3.8 per cent.