Tech boost, trade optimism lead Wall Street higher

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(Reuters) – Wall Street rose on Wednesday, as technology shares gained on the back of Micron’s upbeat results, while comments from Treasury Secretary Steven Mnuchin fueled hopes that the United States and China were making progress in their trade talks.

Tech boost, trade optimism lead Wall Street higher

FILE PHOTO: Traders work on the main trading floor after the opening bell at New York Stock Exchange (NYSE) in New York, U.S. June 20, 2019. REUTERS/Brendan McDermid/File Photo

“We were about 90% of the way there (with a deal) and I think there’s a path to complete this,” Mnuchin said in an interview to CNBC.

Market participants are hoping for a speedy resolution of differences between the two sides as their bitter trade war takes a toll on global growth.

President Donald Trump said earlier in the day it was “absolutely possible” he would emerge from a meeting with Chinese leader Xi Jinping with a deal that would keep him from imposing tariffs he had threatened to put on China.

Trump is expected to meet with Xi at the G20 summit in Japan this weekend. It will be the first time the two leaders have had a face-to-face meeting since trade talks between their countries collapsed in May.

“The tariff war remains a major headwind for the global economy,” said Craig Erlam, senior market analyst at OANDA in London.

“I’m optimistic that we’ll see progress at the G20, at least enough to delay further tariffs being imposed which is surely a positive for markets.”

Micron Technology Inc jumped 13.2% after reporting better-than-expected quarterly results and lifted the Philadelphia Semiconductor index 3.50% higher.

The company said it had resumed some shipments to Chinese telecoms equipment maker Huawei Technologies Co Ltd and still expected demand for its chips to recover later this year.

Tech stocks were up 1.60%, while the trade-sensitive industrial index rose 0.47%.

At 12:55 p.m. ET the Dow Jones Industrial Average was up 90.24 points, or 0.34%, at 26,638.46 and the S&P 500 was up 6.71 points, or 0.23%, at 2,924.09.

The Nasdaq Composite was up 49.97 points, or 0.63%, at 7,934.69 and was helped by gains in shares of Apple Inc, Microsoft Corp and Amazon.com Inc.

Among other gainers, the energy sector jumped 2.1% as oil prices rose after an outage at a major refinery on the U.S. East Coast and on industry data that showed U.S. crude stockpiles fell more than expected. [O/R]

Capping gains on the S&P 500 was a 1% drop in the healthcare sector, weighed by losses in Johnson & Johnson, Pfizer Inc and Merck & Co Inc.

The benchmark index has gained 6% so far in June, hitting a record high last week, largely on hopes that the Federal Reserve would cut interest rates to counter the impact of a U.S.-China trade war.

However, stocks fell steeply on Tuesday after the Fed chairman pushed back on pressure from Trump to cut rates.

Still, markets fully expect a rate cut in July and see a 25% possibility of a half-point move.

The biggest decliner among S&P 500 companies were General Mills Inc’s shares, which slipped 4.8% after the food packaging company missed quarterly sales estimates.

Advancing issues outnumbered decliners by a 1.37-to-1 ratio on the NYSE and by a 1.19-to-1 ratio on the Nasdaq.

The S&P index recorded six new 52-week highs and three new lows, while the Nasdaq recorded 16 new highs and 76 new lows.

Reporting by Shreyashi Sanyal and Aparajita Saxena in Bengaluru; Editing by Anil D’Silva