Tech rally leads US stocks higher

Tech rally leads US stocks higher

A street sign for Wall Street
A street sign for Wall Street outside the New York Stock Exchange (NYSE) in Manhattan, New York City. (Photo: Reuters/Andrew Kelly)

NEW YORK: Wall Street stocks gained ground on Tuesday (May 21) following two straight losing sessions, after the US said it would delay imposing a ban on dealings with Huawei, which gave a boost to technology shares.

The tech-rich Nasdaq Composite Index led major indices lower on Monday on worries about the Huawei ban, and then led the advance on Tuesday, closing at 7,785.72, a gain of 1.08 per cent.

The Dow Jones Industrial Average climbed 197.43 points (0.77 per cent) to finish at 25,877.33, while the broad-based S&P 500 gained 24.13 points (0.85 per cent) to 2,864.36.

Stocks fell sharply on Monday after Google began to sever ties with Huawei. But the US Commerce Department announced late Monday it would delay implementation of the ban for 90 days to allow companies to adjust their operations and avoid sudden disruption.

Nate Thooft, senior portfolio manager of Manulife Asset Management, Huawei seems to be a "bargaining chip" in the broader US-China trade talks, raising concerns China could respond by targeting US tech companies.

Many analysts expect more volatility in markets ahead.

"We don't know what's going to happen on trade," Thooft said.

"Our baseline remains the view that basically there is going to be a trade deal. But the timeline is very questionable on when it's going to happen."

Google-parent Alphabet rose 1.0 per cent, while Apple gained 1.9 per cent, after falling hard on Monday.

Department store chain Kohl's slumped 12.4 per cent as it slashed its profit forecast after first-quarter sales lagged expectations.

Other retailers were mixed after earnings reports, with Home Depot adding 0.2 per cent and TJ Maxx parent TJX gaining 0.5 per cent and JC Penney slumping 7.4 per cent.

Dow member Merck rose 0.8 per cent as it announced it would acquire Peloton Therapeutics, which is developing cancer drugs, for US$1.05 billion.

Source: AFP/de

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