Wall Street rises as Huawei reprieve boosts tech shares
By April Joyner
NEW YORK, May 21 (Reuters) - Shares of technology companies helped lift Wall Street 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.
U.S. President Donald Trump added Huawei HWT.UL 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 .SOX gaining 2.1% to end a three-day slump.
Shares of Huawei suppliers such as Intel Corp INTC.O, Qualcomm Inc QCOM.O, Xilinx Inc XLNX.O and Broadcom Inc AVGO.O rose between 1% and 4.6%.
Technology shares .SPLRCT rose 1.2% 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 .DJI rose 197.43 points, or 0.77%, to 25,877.33, the S&P 500 .SPX gained 24.13 points, or 0.85%, to 2,864.36 and the Nasdaq Composite .IXIC added 83.35 points, or 1.08%, to 7,785.72.
Even with Tuesday's gains, the S&P 500 is still on track to post its first 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.
"The market is so tied to a single news story that it's creating sharp swings on a daily basis," said Oliver Pursche, chief market strategist at Bruderman Asset Management in New York. "Much of the market volatility is also about the fact that we're up 20% from the lows of late December. It's fully valued right here."
Among the S&P 500's major sectors, only defensive consumer staples shares .SPLRCS traded lower, down 0.3%.
Shares of Kohl's Corp KSS.N and J.C. Penney Co Inc JCP.N plunged after the two department stores' quarterly results missed expectations.
Kohl's shares dropped 12.3%, 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 fell 7.0% after the company also reported a bigger-than-expected fall in quarterly same-store sales.
With 463 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 3.56-to-1 ratio; on Nasdaq, a 2.30-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 81 new lows.
Volume on U.S. exchanges was 6.09 billion shares, compared to the 6.97 billion average for the full session over the last 20 trading days.
(Reporting by April Joyner; Additional reporting by Shreyashi Sanyal and Sruthi Shankar in Bengaluru; Editing by Alistair Bell and Phil Berlowitz)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.