NEW YORK (Reuters) – Shares of technology companies helped push Wall Street forward on Tuesday after the United States temporarily eased curbs on China’s Huawei Technologies Co Ltd, alleviating investor concerns about pressure on future corporate results in the sector.
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 20, 2019. REUTERS/Brendan McDermid
U.S. President Donald Trump added Huawei to a trade blacklist last week, leading several companies to suspend business with the world’s largest telecom equipment maker, a move that could weigh on their sales. Chipmakers, many of which sell to Huawei, bore the brunt of Monday’s sell-off.
But late on Monday, the United States granted the Chinese telecoms equipment maker a license to buy U.S. goods until Aug. 19. The development offered a reprieve to shares of chipmakers, with the Philadelphia Semiconductor Index gaining 2.1% in a bid to end a three-day slump.
Shares of Huawei suppliers such as Intel Corp, Qualcomm Inc, Xilinx Inc and Broadcom Inc rose between 1% and 4.5%.
Technology shares rose 1.3% to add the most gains to the S&P 500 among the benchmark index’s major sectors.
“The groups that have been beaten up for the past couple of days have gotten a reprieve,” said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta. “Huawei cast a cloud over tech. It’s so broad-based in how many companies connect with it.”
The Dow Jones Industrial Average rose 185.87 points, or 0.72%, to 25,865.77, the S&P 500 gained 25.69 points, or 0.90%, to 2,865.92 and the Nasdaq Composite added 88.86 points, or 1.15%, to 7,791.24.
Even with Tuesday’s gains, the S&P 500 is still on track to post its biggest monthly decline of the year. The index is now 3% away from its all-time high on May 1 as it has been pressured by mounting concerns about a prolonged U.S.-China trade war.
Among the S&P 500’s major sectors, only defensive consumer staples shares were trading lower, down 0.2%.
Shares of Kohl’s Corp and J.C. Penney Co Inc plunged after the two department stores’ quarterly results missed expectations.
Kohl’s shares dropped 11.1%, the largest decline among S&P 500 companies, after the retailer cut its full-year profit forecast and reported quarterly same-store sales and profit that missed expectations.
Shares of rival J.C. Penney Co Inc fell 8.7% after the company also reported a bigger-than-expected fall in quarterly same-store sales.
With over 460 of S&P 500 companies having posted first-quarter results, 75.2% have topped analysts’ profit expectations. Analysts now expect first-quarter earnings growth of 1.4%, a sharp turnaround from the 2% loss expected on April 1, according to Refinitiv data.
Advancing issues outnumbered declining ones on the NYSE by a 3.42-to-1 ratio; on Nasdaq, a 2.29-to-1 ratio favored advancers.
The S&P 500 posted 38 new 52-week highs and five new lows; the Nasdaq Composite recorded 53 new highs and 72 new lows.
Reporting by April Joyner; Additional reporting by Shreyashi Sanyal and Sruthi Shankar in Bengaluru; Editing by Alistair Bell