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Wall Street gains as US-China trade talks gather pace

By Reuters - May 22,2018 - Last updated at May 22,2018

Traders and financial professionals work ahead of the closing bell on the floor of the New York Stock Exchange in New York City, on Monday (AFP photo)

US stocks rose on Tuesday, adding to gains from a day earlier, as the United States and China made progress on reducing trade tensions after agreeing to put their differences on hold.

Washington neared a deal to lift its ban on US firms supplying Chinese telecoms gear maker ZTE Corp, sources said on Tuesday, while Beijing said it will steeply cut import tariffs for automobiles and car parts.

Shares of Ford, General Motors, as well as the US-listed shares of Fiat, were up between 1 per cent and 2.4 per cent.

"The market is taking very well to what appears to be the fact that Trump is able to manoeuvre the trade talks in our favour," said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey. "We're seeing a continuation of that positive momentum this morning."

Micron jumped 6.9 per cent after announcing a $10 billion share buyback following a raised quarterly forecast on Monday, helping the technology index rise 0.3 per cent.

A 4.2 per cent gain in Lowe's Cos after the home improvement chain named J.C. Penney's Chief Executive Officer Marvin Ellison to the top position boosted consumer discretionary stocks. 

J.C. Penney's tumbled 4.2 per cent.

At 9:59 am ET, the Dow Jones Industrial Average was up 12.78 points, or 0.05 per cent, at 25,026.07 and the S&P 500 was up 5.81 points, or 0.21 per cent, at 2,738.82. The Nasdaq Composite was up 19.98 points, or 0.27 per cent, at 7,414.01.

Declines in Caterpillar and Boeing, which drove gains on Monday, weighed on the blue-chip Dow.

Toll Brothers declined 7.3 per cent after disappointing second-quarter profit and weighed on other homebuilders. Lennar dipped 1.7 per cent, while PulteGroup slid 2 per cent.

The possibility of a ZTE reprieve helped shares of optical component makers. Acacia Communications, which got 30 per cent of its 2017 revenue from ZTE, rose 1.4 per cent, while Oclaro gained 1.1 per cent.

Advancing issues outnumbered decliners by a 1.41-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.33-to-1 ratio on the Nasdaq.

The S&P index recorded 18 new 52-week highs and no new lows, while the Nasdaq recorded 90 new highs and 9 new lows.

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