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* Shares of tariff-sensitive Apple, Boeing (NYSE:BA) rise
* All 11 major S&P 500 sectors in positive territory
* U.S. core capital goods orders rise; shipments tumble
* Indexes up: Dow 1.04%, S&P 500 1%, Nasdaq 1.16%
(Updates to early afternoon)
By Akanksha Rana
Aug 26 (Reuters) - Wall Street's main indexes rose 1% on
Monday as U.S. President Donald Trump eased his stance on trade
with China, calming investor nerves after an intense feud
between the world's top two economies last week sent stocks
tumbling.
Shares of tariff-sensitive companies rose in response, with
Apple Inc's AAPL.O 2.1% gain boosting technology stocks
.SPLRCT , while a 1% rise in Boeing Co BA.N lifted the Dow
Jones Industrial Average .DJI .
Chipmakers, which heavily rely on China for their revenue,
rose, with the Philadelphia Semiconductor index .SOX adding
1.1%.
Trump said on Monday Beijing had contacted Washington
overnight to say it wanted to return to the negotiating table,
adding that talks between the two countries were "more
meaningful" than any time. The U.S. president also said he was confident that China was
sincere about wanting a trade deal with the United States.
"If there is one thing we have learned over the last year or
so is things can change very quickly," said Mike Loewengart,
vice president, investment strategy at E*Trade Financial Corp.
"The sentiment is optimism on account of the hopes that
there will be some progress on the trade front, coupled with
some encouraging economic metrics that reinforced the strength."
Data from the Commerce Department showed new orders for key
U.S.-made capital goods rose modestly in July, while shipments
fell by the most in nearly three years. The report could back
the case for the Federal Reserve to cut interest rates again
next month. Concerns about the global economy slipping into recession
and uncertainty over the pace of U.S. interest rate cuts have
made investors nervous about how far the longest cycle of U.S.
expansion would survive. The S&P 500 is now 5% off its record
high.
The benchmark index logged its worst run of weekly losses on
Friday since a selloff in late May as both sides threatened to
slap more tariffs on each other's goods. Despite the broad-based rally on Monday that saw all 11 S&P
500 sectors rise, Wall Street's fear gauge, the CBOE Volatility
index .VIX , hit its highest level in more than a week, earlier
in the session.
"This is the type of market environment that is likely to
persist. We would advise investors to prepare for a protracted
trade war and we can expect additional market volatility,"
Loewengart added.
The Dow Jones Industrial Average .DJI rose 266.54 points,
or 1.04%, to 25,895.44, the S&P 500 .SPX gained 28.34 points,
or 1.00%, to 2,875.45 and the Nasdaq Composite .IXIC added
89.97 points, or 1.16%, to 7,841.73.
Among other stocks, Celgene Corp CELG.O rose 2.9% after
Amgen Inc AMGN.O said it would buy the company's psoriasis
drug Otezla, clearing the way for Bristol-Myers Squibb (NYSE:BMY) BMY.N
to go ahead with its $74 billion deal for Celgene. Shares of
Bristol-Myers jumped 2.9%. Shares of Dish Network Corp DISH.O jumped 3.7%, after
brokerage Raymond James double upgraded the stock to "strong
buy" from "market perform." Advancing issues outnumbered decliners for a 2.33-to-1 ratio
on the NYSE and a 2.00-to-1 ratio on the Nasdaq.
The S&P index recorded four new 52-week highs and 17 new
lows, while the Nasdaq recorded 15 new highs and 120 new lows.