U.S. stocks moved higher in midday trading Monday as investors hoped for reduced trade tensions between the U.S. and China. President Donald Trump tweeted over the weekend that the U.S. could ease sanctions on Chinese telecommunications company ZTE. That sent shares in U.S. companies that could benefit from such a move higher.
Technology and health care companies accounted for a big slice of the market’s gains. Energy stocks also rose as crude oil prices climbed. Banks moved higher along with bond yields.
KEEPING SCORE: The S&P 500 index added 7 points, or 0.3 percent, to 2,735 as of 12:21 p.m. Eastern Time. The Dow Jones industrial average climbed 113 points, or 0.5 percent, to 24,944. The Nasdaq composite rose 35 points, or 0.5 percent, to 7,438. The Russell 2000 index of smaller-company stocks picked up less than 1 point to 1,607. The stock market is coming off its best weekly gain since early March.
U.S.-CHINA TRADE: Trump softened his tone on U.S.-China trade over the weekend, tweeting on Sunday that he would help ZTE get “back into business” despite U.S. sanctions, saying too many jobs in China are at stake after the U.S. government cut off access to its American suppliers. ZTE’s Hong Kong-traded shares have been suspended since U.S. authorities banned it last month for seven years from importing U.S. components in a case involving illegal exports to North Korea and Iran. China’s foreign ministry responded by saying it “highly commended” the move, ahead of trade talks in Washington this week.
U.S. companies that would stand to benefit from an effort to rescue ZTE moved higher. Acacia Communications jumped 10.5 percent to $34.82, while Oclaro gained 5.7 percent to $9.05.
WAITING ON CHINA: Qualcomm and NXP Semiconductors got a boost as investors hope that Chinese regulators will reverse their stance and approve Qualcomm’s proposed $44 billion acquisition of NXP. China is the final major government withholding approval of the deal. But Bloomberg News reported that Chinese regulators are reviewing the deal again.
Qualcomm rose 2.9 percent to $56.83, while NXP surged 13.3 percent to $112.14.
UP WITH TECH: The market got a boost from a pickup in technology sector stocks. Symantec jumped 9.6 percent to $21.39.
OH SO HEALTHY: Investors continued to bid up shares in health care companies. CVS Health gained 2.8 percent to $66.24.
TUNED OUT: Viacom fell 6.1 percent to $28.39 after CBS sued its controlling shareholder, seeking to block efforts to make the company combine with Viacom. CBS shares added 3.4 percent to $54.33.
BET ON THIS: Casino operators and equipment makers surged after the Supreme Court struck down a federal law that barred gambling on football, basketball and other sporting events in most states. The ruling gives states the go-ahead to legalize sports betting. Penn National Gaming rose 4.3 percent to $33.62, while Empire Resorts jumped 14.7 percent to $22.32. Scientific Gaming, which makes casino and interactive games as well as lottery games, vaulted 11.8 percent to $59.65.
NO DEAL: Xerox slid 7.3 percent to $27.97 after the copier maker ended merger talks with Fujifilm and resolved a dispute with investors Carl Icahn and Darwin Deason.
ENERGY: Benchmark U.S. crude oil rose 47 cents to $71.17 a barrel in New York. Brent crude, used to price international oils, gained $1.11, or 1.4 percent, to $78.23 a barrel in London.
Rising oil prices helped lift energy stocks. Range Resources added 3.3 percent to $14.77.
BOND YIELDS: Bond prices fell. The yield on the 10-year Treasury rose to 2.99 percent from 2.97 percent late Friday.
CURRENCIES: The dollar rose to 109.51 yen from 109.30 yen on Friday. The euro strengthened to $1.1975 from $1.1945.
MARKETS OVERSEAS: Major stock indexes in Europe declined. Germany’s DAX lost 0.2 percent, while France’s CAC 40 dipped 0.02 percent. Britain’s FTSE 100 edged 0.2 percent lower. In Asia, Japan’s benchmark Nikkei 225 closed 0.5 percent higher. South Korea’s Kospi dipped 0.1 percent. Hong Kong’s Hang Seng jumped 1.4 percent.