Tech stocks lead Wall Street higher on China-U.S. trade talk progress

(Reuters) – U.S. stocks jumped on Tuesday, rising for the second day in a row, led by technology companies on signs of progress between China and the United States to resolve their trade dispute, which has roiled the markets for months.

The roughly 1 percent gains, also boosted by data that showed U.S. producer prices unexpectedly rose last month, helped the benchmark S&P 500 and the blue-chip Dow Jones Industrial Average sharply cut their losses for the year.

U.S. and Chinese officials discussed a road map for the next stage of trade talks, while President Donald Trump said negotiations were “very productive” and an “important announcement” was imminent.

Earlier, Bloomberg reported China is moving to cut import tariffs on American-made cars to 15 percent from 40 percent, sending shares of General Motors Co and Ford Motor Co up more than 2 percent.

“This is a garden variety oversold bounce driven by headlines on China tariffs,” said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.

“When you bounce from deeply oversold condition, the stuff that led down is the stuff that leads higher.”

Technology stocks, which helped power a dramatic reversal in the market on Monday, rose 1.23 percent and provided the biggest boost.

The trade-sensitive chipmakers index jumped 2.12 percent. The industrial sector gained 1.23 percent, led by gains in Caterpillar Inc and Boeing Co.

The S&P snapped a three-day losing streak on Monday as the benchmark index bounced off an eight-month low it hit on concerns over global growth.

Data showed U.S. producer prices unexpectedly rose in November as increases in the costs for services offset a sharp decline for energy products, but the overall momentum in wholesale inflation appears to be slowing.

The report comes as investors also grapple with concerns over interest rates and is ahead of the more crucial consumer price data on Wednesday.

The S&P financials index was up 1.2 percent, while rate-sensitive S&P bank stocks rose 1.20 percent.

At 9:59 a.m. ET, the Dow was up 241.77 points, or 0.99 percent, at 24,665.03. The S&P was up 29.32 points, or 1.11 percent, at 2,667.04 and the Nasdaq Composite was up 88.50 points, or 1.26 percent, at 7,109.02.

The defensive utilities and real estate sectors eked out the smallest gains.

Alphabet Inc was up 1 percent ahead of Google Chief Executive Officer Sundar Pichai’s congressional hearing later in the day.

Pfizer Inc was down 1 percent after a JP Morgan downgrade. The drugmaker and Apple Inc, off 0.6 percent, were the only two Dow stocks trading lower.

Advancing issues outnumbered decliners by a 6.09-to-1 ratio on the NYSE and a 3.66-to-1 ratio on the Nasdaq.

The S&P index recorded three new 52-week highs and no new lows, while the Nasdaq recorded 16 new highs and 48 new lows.