By Caroline Valetkevitch
(Reuters) - U.S. stocks rallied on Monday after the United States and China put their trade differences "on hold" to work on a wider agreement, while sentiment was also boosted by the nearly $28 billion worth of merger deals.
The truce sparked a broad rally, with the Dow Jones Industrial Average <.DJI> up more than one percent. The small-cap Russell 2000 <.RUT> hit a record high for the fourth straight session, though it was underperforming large caps.
U.S. Treasury Secretary Steven Mnuchin said on Sunday the United States and China had agreed to drop their tariff threats, while China on Monday praised a significant dialing back of tensions.
"The big news over the weekend was that a trade war has been averted, and so we had an adjustment in there, covering bets that there would be negative news coming out of the discussion," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
The S&P industrial sector <.SPLRCI> advanced 1.7 percent. Boeing
At 3:18 p.m. EDT, the Dow Jones Industrial Average <.DJI> rose 295.18 points, or 1.19 percent, to 25,010.27, the S&P 500 <.SPX> gained 18.93 points, or 0.70 percent, to 2,731.9 and the Nasdaq Composite <.IXIC> added 29.21 points, or 0.4 percent, to 7,383.54.
Still, not all U.S. business leaders were happy with the trade war truce, with some cautioning that Washington would find it tough to rebuild momentum to address what they see as troubling Chinese policies.
The easing of the trade dispute also boosted the chipmakers, whose major clients include Chinese firms, with the Philadelphia chip index <.SOX> gaining 0.7 percent. The technology sector <.SPLRCT> rose 0.7 percent.
Regional lender MB Financial
On the downside, Celgene fell 38.1 percent and hit a four-year low, dragging on the Nasdaq Biotech index <.NBI> 1.5 percent lower.
Advancing issues outnumbered declining ones on the NYSE by a 2.41-to-1 ratio; on Nasdaq, a 1.50-to-1 ratio favored advancers.
The S&P 500 posted 33 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 162 new highs and 31 new lows.
(Additional reporting by Medha Singh in Bengaluru; Editing by Sriraj Kalluvila and Chizu Nomiyama)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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Updated Date: May 22, 2018 02:05 AM