US STOCKS-Wall St holds on to gains ahead of G20 summit

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* Kudlow says U.S. may move ahead on additional China
tariffs
* Xi to present Trump with terms for settling trade war -WSJ
* U.S., China agree to tentative trade truce -report
* Boeing falls as FAA cites new flaw in 737 MAX jets
* Walgreens rises on quarterly profit beat
* Indexes up: Dow 0.12%, S&P 0.42%, Nasdaq 0.65%

(Updates to early afternoon)
By Shreyashi Sanyal
June 27 (Reuters) - U.S. stocks were modestly higher on
Thursday, propped up by financials, but caution reigned in the
build-up to U.S.-China trade talks at the G20 summit this
weekend.
The two sides were laying out an agreement that would help
avert the next round of tariffs on an additional $300 billion of
Chinese imports, the South China Morning Post reported, citing
sources. However, a Wall Street Journal report that Chinese President
Xi Jinping planned to present President Donald Trump with a set
of terms Washington should meet before Beijing is ready to
settle their trade dispute tempered optimism. "I think expectations for a deal are still fairly low. All
markets want to see now is the trade deal is not worsening,"
said Rick Meckler, partner, Cherry Lane Investments in New
Vernon, New Jersey.
"Stock prices are fairly high by most measures and for those
looking to invest more, the lack of clarity keeps them from
making that commitment."
The benchmark S&P 500 index .SPX briefly hit a session low
after White House economic adviser Larry Kudlow said there were
no preconditions set ahead of any trade talks with China.
Financials .SPSY rose 0.91%, with big lenders leading the
charge ahead of results of the second part of the Federal
Reserve's annual stress test for banks.
Semiconductor companies, which have a sizable revenue
exposure to China, traded higher, with the Philadelphia
Semiconductor index .SOX up 1.32%. The S&P technology sector
.SPLRCT was up 0.25%.
Boeing Co BA.N fell 1.9%, pressuring the blue-chip Dow
Jones index .DJI , after Reuters reported that the U.S. Federal
Aviation Administration identified a new flaw in the
planemaker's grounded 737 MAX jets. At 12:57 p.m. ET the Dow Jones Industrial Average was up
31.62 points, or 0.12%, at 26,568.44 and the S&P 500 was up
12.24 points, or 0.42%, at 2,926.02.
The Nasdaq Composite .IXIC was up 51.34 points, or 0.65%,
at 7,961.31.
The bellwether S&P 500 has recouped most of its losses in
May and is on pace to end June with a 6% gain, on hopes that the
Fed would cut interest rates to counter slowing growth.
Among other stocks, Walgreens Boots Alliance Inc WBA.O
gained 5%, after the drugstore chain beat analysts' expectations
for quarterly profit.
Ford Motor Co F.N rose 2.78% after the carmaker said it
will have cut 12,000 jobs in Europe by the end of next year to
try to return the business to profit.
Conagra Brands Inc CAG.N tumbled 12%, the most among S&P
500 companies, after the packaged food company's quarterly sales
and profit fell short of analysts' estimates. Advancing issues outnumbered decliners by a 2.34-to-1 ratio
on the NYSE and by a 2.68-to-1 ratio on the Nasdaq.
The S&P index recorded six new 52-week highs and one new
low, while the Nasdaq recorded 22 new highs and 38 new lows.