Tech shares, trade optimism push Wall Street higher

(Reuters) – Wall Street’s main indexes hit session highs on Friday, in broad based gains led by technology stocks, as sentiment was lifted by an upbeat note in trade talks between the United States and China.

FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 7, 2019. REUTERS/Brendan McDermid/File Photo

China’s state-run news agency said Washington and Beijing were making further substantive progress on trade talks. The report came as a relief after news that a summit to seal a deal between the two sides will not happen at March-end.

Chipmakers, which get a large portion of their revenue from China, rose, with the Philadelphia SE chip index up 2.87 percent, while the broader technology sector rose 1.61 percent.

Broadcom Inc jumped nearly 8.9 percent and was the biggest boost to the S&P and Nasdaq, after the company’s quarterly profit beat analysts’ estimates.

“Chipmakers are greatly linked to China, so when we have positive news out of semiconductor space it is a reaffirmation that the fundamentals of tech are still strong,” said Jeff Kravetz, regional investment strategist at U.S. Bank Wealth Management in Phoenix.

“We know that trade is a work in progress, but it looks like we’re getting closer to an initial trade agreement and that is helping markets.”

Domestic data showed manufacturing output fell for a second straight month in February and factory activity in New York state was weaker than expected this month.

This follows a batch of weak data this week that underscored the Federal Reserve’s dovish stance on future interest rate hikes and has helped the S&P 500 rise 3 percent, its biggest weekly gain in more than three months.

The Fed will remain patient for a little longer than thought just last month, waiting until the third quarter before raising rates once more, and then stay on the sidelines, a Reuters poll of economists showed.

British lawmakers voted to seek a delay in Britain’s exit from the European Union on Thursday, setting the stage for Prime Minister Theresa May to renew efforts to get her divorce deal approved by parliament next week.

At 12:51 p.m. ET the Dow Jones Industrial Average was up 203.71 points, or 0.79 percent, at 25,913.65. The S&P 500 was up 20.54 points, or 0.73 percent, at 2,829.02 and the Nasdaq Composite was up 78.85 points, or 1.03 percent, at 7,709.76.

The benchmark S&P 500 is now just 3.6 percent away from its September closing high.

Boeing Co rose 2.2 percent after the company said a software upgrade for the 737 MAX aircraft will be rolled out in the coming weeks.

The world’s largest planemaker has tumbled about 11 percent since its money-spinning 737 MAX jets were grounded globally following a recent fatal crash in Ethiopia.

Only the defensive real estate sector was trading lower.

Photoshop maker Adobe Inc fell 4.3 percent after its current-quarter revenue forecast fell below analysts’ estimates.

Facebook Inc dropped 2.5 percent after the social media giant said its Chief Product Officer Chris Cox would be leaving the company.

Advancing issues outnumbered decliners for a 2.60-to-1 ratio on the NYSE and a 2.30-to-1 ratio on the Nasdaq.

The S&P index recorded 59 new 52-week highs and no new low, while the Nasdaq recorded 74 new highs and 28 new lows.

Reporting by Amy Caren Daniel and Medha Singh in Bengaluru; Editing by Shounak Dasgupta

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