Wall Street higher as trade war fears ease

(Reuters) – U.S. stocks were higher on Tuesday as investor concerns about rising U.S.-China trade tension eased after Chinese President Xi Jinping promised to cut import tariffs.

The three main indexes, however, were off their session highs as investors locked in some gains ahead of the start of the earnings season this week.

Nine of the 11 major S&P sectors were higher, with the energy index .SPNY adding more than 3 percent as oil broke above $70 a barrel.

“The markets are saturated and it is a bit of profit taking as the markets get set for the most anticipated financial earnings this Friday,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville.

U.S. stocks will face a major test in coming weeks as first-quarter earnings pour in. JPMorgan Chase (JPM.N), Citigroup (C.N) and Wells Fargo (WFC.N) will kick off the earnings season on Friday.

Analysts expect quarterly profits for S&P 500 companies to rise 18.5 percent from a year ago, which would be the biggest gain in seven years, according to Thomson Reuters I/B/E/S.

At 13:11 a.m. ET, the Dow Jones Industrial Average .DJI was up 379.35 points, or 1.58 percent, at 24,358.45, and the S&P 500 .SPX was up 37.97 points, or 1.45 percent, at 2,651.13. The Nasdaq Composite .IXIC was up 107.63 points, or 1.55 percent, at 7,057.97.

Xi said China will sharply widen market access for foreign investors, a point of contention for U.S. President Donald Trump’s administration.

His comments buoyed global markets, which have been under pressure as China and the United States threatened each other with billions in tariffs and investors feared that protectionist measures would hit global economic growth.

“What you are seeing in the market is an alleviation of trade war fears and people trying to get back in and reposition themselves for what they hope – no trade war,” said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.

The so-called FANG stocks – Facebook Inc (FB.O), Amazon.com (AMZN.O), Netflix Inc (NFLX.O) and Alphabet Inc’s Google (GOOGL.O) – gave up most of their gains and were up between 0.5 percent and 1.3 percent ahead of Facebook CEO Mark Zuckerberg’s testimony before U.S. lawmakers on Tuesday and Wednesday.

Zuckerberg is expected to strike a conciliatory tone in an attempt to blunt possible regulatory fallout from the privacy scandal engulfing his social network.

Sprint (S.N) shares jumped 18 percent after reports that the company had restarted merger talks with T-Mobile US Inc (TMUS.O).

Advancing issues outnumbered decliners on the NYSE for a 3.68-to-1 ratio on the upside and on the Nasdaq for a 3.84-to-1 ratio favoring advancers.

The S&P 500 index showed six new 52-week highs and one new lows, while the Nasdaq recorded 40 new highs and 26 new lows.