U.S. Stocks Notch Solid Gains As China Eases Trade Tensions

NEW YORK (AP) -

Stocks notched broad gains on Wall Street Wednesday as investors drew encouragement from China’s move to exempt some U.S. products from a recent round of tariffs.

Technology, health care and communication services stocks powered much of the rally. The benchmark S&P 500 index, which had been essentially flat since Friday, is on track for its third straight weekly gain.

Bond yields continued to climb. Oil prices fell, and investors also continued to favor smaller-company stocks.

Wednesday’s push into technology companies marked a reversal from the first couple of days of the week, when traders bid up energy, financials and other sectors that had sold off in recent weeks. The tech sector is particularly sensitive to fallout from the trade war between Washington and Beijing because many big companies, such as Apple, manufacture products in China.

The S&P 500 rose 21.54 points, or 0.7%, to 3,000.93. It’s the first time the index has finished above 3,000 points since July 30.

The Dow Jones Industrial Average gained 227.61 points, or 0.8%, to 27,137.04. The Nasdaq picked up 85.52 points, or 1.1%, to 8,169.68.

The Russell 2000 index of smaller-company stocks outpaced the broader market, climbing 32.72 points, or 2.1%, to 1,575.71.

Major indexes in Europe also finished broadly higher.

Bond prices fell. The yield on the 10-year Treasury rose to 1.75% from 1.70% late Tuesday.

Investors continue to expect the Federal Reserve will cut interest rates at its meeting next week in another bid by the central bank to help maintain U.S. economic growth. The Fed raised its benchmark interest rate in July by a quarter point. That was its first hike in a decade.

Despite a rough and tumble August, the stock market is off to a solid September, with the S&P 500 coming off two weeks of gains.

The Russell 2000 is the clear winner midway into this week, boasting a 4.7% gain. Smaller companies within the index are viewed as more insulated from the impact of volatile swings in the U.S.-China trade war. They are also less affected by a stronger U.S. dollar than multinational companies.

The S&P 500 is up 0.7% for the week and the Nasdaq is up 0.8%. The Dow is slightly stronger, notching a 1.3% gain.

Apple was among the big gainers as investors snapped up technology stocks. Shares in the iPhone maker, which unveiled a variety of new products and services on Tuesday, climbed 3.2%. Chipmaker Intel gained 1.9%.

Shares in tobacco giants Altria Group and Philip Morris International rose after a brief slide following the Trump administration’s announcement that it is looking to ban thousands of flavors used in e-cigarettes amid an outbreak of breathing problems tied to vaping.

Altria, which has taken a roughly $13 billion stake in vaping giant Juul, rose 0.6%. Philip Morris gained 0.7%. The companies confirmed last month that they are in talks to merge after they split in 2008.

Benchmark crude oil fell $1.65 to settle at $55.75 a barrel. Brent crude oil, the international standard, dropped $1.57 to close at $60.81 a barrel. Wholesale gasoline fell 2 cents to $1.57 per gallon. Heating oil declined 3 cents to $1.90 per gallon. Natural gas fell 3 cents to $2.55 per 1,000 cubic feet.