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Overnight Markets: US stocks rise as investors shrug off trade war fears

The biggest boost came from the information technology index, which was up 1.2%.

 
Overnight Markets: US stocks rise as investors shrug off trade war fears

US stocks closed higher Monday, with the Dow bouncing back from a four-session losing streak, as investors said they were expecting US President Donald Trump to back down on his threat to impose hefty tariffs on steel and aluminum imports.

The Dow Jones Industrial Average bounced back from an earlier decline to rise 337 points, or 1.4%, to 24,875. The S&P 500 index added 30 points, or 1.1%, to 2,721, with all 11 subsectors finishing higher, led by utilities and financials. The Nasdaq Composite Index rose 73 points, or 1%, to 7,331.

Shares rose on bets that the threat was just a negotiating tool after Trump said Canada and Mexico could avoid his proposed tariffs if they ceded ground on the North American Free Trade Agreement.

Rattling some investors was news that Sunday’s Italian election is expected to end in a hung parliament, as populist euroskeptic parties made a better showing than forecast. But in Germany, Social Democrats voted to support a grand coalition government. That means Chancellor Angela Merkel will serve a fourth term.

All 11 S&P sectors gained, with the biggest boost coming from the information technology index, which was up 1.2%. Facebook, Amazon and JP Morgan were three of the biggest drivers.

The energy sector was up 1.2% helped by rising oil prices due to forecasts for robust demand growth and concerns that OPEC will not be able to increase its production capacity.

The utilities sector was the biggest percentage gainer with a 1.9% increase followed by the financial sector, which was up 1.7%.

Clearside Biomedical jumped 37% after the drug developer’s eye drug met the main goal in a late-stage study, while Dermira plunged 64% after the company abandoned its acne drug.

Shares of XL Group Ltd. surged 29% after French rival AXA SA said it would acquire the insurer for $15.3 billion, pending approval from XL’s shareholders and regulators.

In Asia, shares regained some ground on Tuesday in morning session after Trump faced growing pressure from political allies to pull back from proposed steel and aluminum tariffs.

Japan's Nikkei 225 jumped 2.03%. Over in South Korea, the benchmark Kospi advanced 1.16%. Meanwhile, the S&P/ASX 200 rose 1.29%.

In Hong Kong, the Hang Seng Index added 1.28%, while on the mainland, the Shanghai Composite Index was down 0.11%.

 

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