Hope for U.S.-China trade raises stock market

NEW YORK — Industrial and technology companies led stocks to solid gains Monday after the United States and China appeared to make significant progress in trade talks. That helped ease concerns among investors that the world’s two biggest economies might be headed for a trade war.

After another round of talks, the two countries agreed not to place tariffs on goods imported from the other. The Chinese government said it will buy more U.S. goods, including energy and agricultural products, while Treasury Secretary Steven Mnuchin said the United States postponed its proposal to put tariffs on up to $150 billion in goods from China. The two sides gave no indication of how much progress they had made toward ending their dispute entirely and both said hostilities could increase again.

The S&P 500 index climbed 20.04 points, or 0.7 percent, to 2,733.01. The Dow Jones industrial average rose as much as 371 points during the morning and finished with a gain of 298.20 points, or 1.2 percent, to 25,013.29. The Nasdaq composite gained 39.70 points, or 0.5 percent, to 7,394.04. The Russell 2000 index of smallercompany stocks set another record close as it jumped 10.81 points, or 0.7 percent, to 1,637.44.

Mark Hackett, chief of investment research at Nationwide Investment Management, said investors overreacted to the possibility of a trade war and they may be slowly learning to take a more patient approach with statements by the Trump administration and other nations, which is a good thing, Hackett says, because future administrations may borrow from Trump’s aggressive style.

“Treating Trump literally is destructive for investors,” he said. “There’s a lot of these issues where there are going to be hyperbolic statements made in the public sphere by both sides.”

All 11 sectors in the S&P 500 index finished higher. Among industrials, Boeing gained 3.6 percent to $363.92 and construction equipment maker Caterpillar rose 2.1 percent to $158.92. In the financial sector, Bank of New York Mellon added 1.3 percent to $57.72 and JPMorgan Chase rose 0.9 percent to $112.15.

Trade disputes have occupied a lot of investors’ attention for the last two months. Stocks have rallied on signs progress was being made, only to fall back when the situation appeared to worsen. Hackett said Wall Street could get over its trade worries relatively quickly if talks go well.

If that happens, he said stocks could be set for further gains because they are still below their early 2018 highs and analysts expect stronger earnings growth, which makes stock prices seem less expensive.

Chipmakers rallied after Micron Technology raised its profit and revenue forecasts for the fiscal third quarter. Micron jumped 3.9 percent to $55.48 while Intel picked up 1.5 percent to $54.32 and Lam Research added 2.2 percent to $199.87.

That contributed to a broad rally in technology stocks. Microsoft gained 1.3 percent to $97.60 and Google’s parent company Alphabet rose 1.3 percent $1,084.01.

Fifth Third Bancorp is buying Chicago’s MB Financial for about $4.7 billion, mostly in stock. The deal values MB at $54.20 per share, and its stock rose 12.9 percent to $49.28 while Fifth Third tumbled 7.9 percent to $30.90.

Investment manager Blackstone agreed to buy LaSalle Hotel Properties for $33.50 a share, or $3.7 billion in cash. LaSalle jumped 5.4 percent to $33.61 while Blackstone rose along with other financial firms and gained 1.6 percent to $31.79.