(Reuters) – US stocks rebounded broadly on Monday after the United States and China put a potential "standby" trade war to work on a broader agreement, and the sentiment was also fueled by the merger American for almost $ 28 billion offers.
USA UU Treasury Secretary Steven Mnuchin said on Sunday that the United States and China agreed to withdraw their tariff threats on billions of dollars of goods from each country, while China on Monday praised a significant reduction in tensions.
That sounded good to stock investors, who are increasingly worried that a direct trade war will hurt the global economy and end the multi-year closure of Wall Street.
"I am encouraged," said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York. "People see this commercial war" on hold "as something positive, they're going to want to go back to the market."
"Technology, industrial products, energy, finance and discretionary consumption will benefit today, it can include areas of the market that are involved in trade with China, I think that's what will help."
Nine of the top 11 sectors of S & P were higher, led by the .SPLRCT of the technology sector 1.21% profit. Apple ( AAPL.O ), which has China as the fastest growing market, rose 1.4 percent, giving the biggest boost to the S & P 500 and the Nasdaq.
The industrial sector .SPLRCI gained 1.20 percent, led by a 2.4 percent jump in Boeing ( BA.N ), which sells about a quarter of its commercial aircraft to Chinese customers. Caterpillar ( CAT.N ) gained 2.3 percent.
At 9:54 a.m. EDT, the Dow Jones Industrial Average .DJI rose 277.12 points, or 1.12 percent, to 24,992.21, the S & P 500 .SPX rose 20.17 points, or 0.74 percent, to 2,733.14 and the Nasdaq compound .IXIC rose 66.85 points, or 0.91 percent, to 7,421.19.
Dow's biggest winner was General Electric ( GE.N ), which rose 2.1 percent after the company said it would merge its transportation business with rail equipment manufacturer Wabtec ( WAB.N ]) in a deal of $ 11.1 billion. Wabtec jumped about 5 percent to a maximum of almost three years.
Still, not all US business leaders UU They were happy to see the trade dispute shrink, and some said it would be difficult for Washington to rebuild the momentum to address what they see as problematic Chinese policies.
However, the United States that delayed the application of tariffs to Chinese imports affected steel stocks. AK Steel ( AKS.N ) and US Steel Corp ( X.N ) each fell more than 3 percent.
Chip makers, whose main clients include Chinese companies, also posted large gains, supported by Micron ( MU.O ) which raises the forecast for the current quarter.
Micron increased by 4.4 percent, while Intel ( INTC.O ) gained 2.3 percent. All members of the Philadelphia .SOX chip index were higher, with the index gaining 1.81 percent.
Shares of regional bank MB Financial ( MBFI.O ) rose 13.9 percent after Fifth Third Bancorp ( FITB.O ) said it would buy the rival smaller in a deal of $ 4,700 million. Fifth Third shares fell 7.1 percent, the most in the S & P.
The S & P index recorded 29 new highs of 52 weeks and three new lows, while the Nasdaq recorded 109 new highs and 10 new highs minima.
Report of Medha Singh in Bengaluru; Editing by Sriraj Kalluvila