Wall Street gains as US-China trade talks resume

A monitor displays numbers ahead of the closing bell on the floor of the New York Stock Exchange (NYSE) on Jan 29, 2019 in New York City. (AFP pic)

NEW YORK: US stocks rose on Monday, led by industrial companies, as the United States and China began their latest round of trade talks to hammer out a deal before the looming March deadline.

China struck an upbeat note on the talks, while White House senior counsellor Kellyanne Conway also expressed confidence of a possible deal.

Boeing, the largest US exporter to China, and Caterpillar Inc both gained 1% and pushed the trade-sensitive industrial sector 0.71% higher.

“These trade talks are being viewed as a positive,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

“There is still a lot of uncertainty, but there’s this pattern of markets embracing good news a little bit more than bad news.”

The latest talks come against the backdrop of last month’s discussions ending without a deal and the top US negotiator declaring that a lot more work needed to be done.

“The market is reacting to shifting news but there won’t be a significant move until we get a resolution to trade,” Brown said.

Also on investors’ watchlist is the border security funding talks, which collapsed on Sunday after Democratic and Republican lawmakers clashed over immigrant detention policy. A special negotiating panel is aiming to reach a deal by Monday ahead of a Friday deadline to avert another government shutdown.

Trade uncertainty and worries of a global economic slowdown capped gains on the S&P 500, which ended last week flat. Still the benchmark index is nearly 16% above its December lows, helped in part by a dovish Federal Reserve and largely upbeat earnings reports.

Of the S&P 500 companies that have reported fourth-quarter earnings, 71.2% have topped estimates, according to IBES data from Refinitiv. But analysts’ estimates for first-quarter earnings have turned negative for the first time since 2016.

At 9.39am ET, the Dow Jones Industrial Average was up 78.62 points, or 0.31%, at 25,184.95. The S&P 500 was up 9.43 points, or 0.35%, at 2,717.31 and the Nasdaq Composite was up 37.41 points, or 0.51%, at 7,335.61.

The energy sector fell 0.54% and was the only major S&P sector to drop, as oil prices slipped.

The heavyweight FAANG stocks – Facebook, Apple, Alphabet, Netflix and Amazon.com Inc – rose between 0.4% and 1.4%.

Electronics Arts gained 8.8% after analysts were upbeat about a strong start to the videogame publisher’s newly launched rival to “Fortnite”.

Advancing issues outnumbered decliners by a 1.78-to-1 ratio on the NYSE and by a 1.99-to-1 ratio on the Nasdaq.

The S&P index recorded 15 new 52-week highs and one new lows, while the Nasdaq recorded 34 new highs and six new lows.