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* Trump says trade talks to restart, will meet with Xi
* Tech boosts S&P 500; trade-sensitive industrials jump
* Defensive stocks decline among 11 S&P sectors
* Two-day Fed policy meeting in focus
* Indexes jump: Dow 1.46%, S&P 1.12%, Nasdaq 1.60%
(Updates to afternoon)
By Noel Randewich
June 18 (Reuters) - Wall Street surged on Tuesday and the S&P
500 approached a record high after Washington rekindled trade talks
with Beijing, boosting sentiment along with growing investor
confidence that the Fed will cut interest rates this year.
President Donald Trump said he would meet with Chinese President
Xi Jinping at the G20 summit later this month, and said talks between
the two countries would restart after a recent lull.
Global stock markets have rallied and retreated repeatedly in
recent months in reaction to comments from Trump about the progress -
or lack of progress - in negotiating an end to the trade conflict.
Trump's statement on Tuesday pushed up trade-sensitive industrials
up 2.0% and technology stocks gained 1.9%. Together, they were the
biggest boost to the benchmark index .
Chip companies, which have a sizable revenue exposure to China,
led the rally in tech stocks, with the Philadelphia Semiconductor
index surging 4.8%.
"We can't discount how big a deal it is for China and the
U.S. not to go into a prolonged trade spat. I don't think we're out of
the woods yet, though," said King Lip, chief investment
strategist at Baker Avenue Asset Management in San Francisco.
"I’d wait for the G20 meeting to see actual discussions
coming out of that before we go back into a risk-on mode," he
The U.S.-China trade war and its impact on economic growth has
investors increasingly expecting the Federal Reserve will cut rates to
preserve the U.S. economic expansion, which would be the longest on
record this summer.
The Fed is widely expected to leave interest rates unchanged at
its two-day policy meeting that ends Wednesday, while laying the
foundation for a cut later this year. The Fed is scheduled to release
its statement at 2 p.m. (1800 GMT) on Wednesday and Chairman Jerome
Powell will hold a press conference shortly after.
The S&P 500 has gained 6% so far this month, and is only about
1% from the all-time high hit in early May.
Comments by European Central Bank President Mario Draghi
indicating the possibility of fresh rate cuts or asset purchases also
At 2:37 p.m. ET, the Dow Jones Industrial Average was up 1.46%
at to 26,494.54, while the S&P 500 gained 1.12% to 2,922.14.
The Nasdaq Composite added 1.6% to 7,970.33.
Apple Inc , Amazon.com Inc and Microsoft Corp rose between
1% and 2.5%, contributing the most to gains in the S&P 500 and Nasdaq.
Boeing Co jumped 4.7%, buoying the Dow, after the planemaker
received an order for its 737 MAX jets valued at more than $24 billion
at list prices; the 737 MAX has been grounded since March after two
The utilities , real estate and consumer staples sectors,
all of which are viewed as defensive, were the only decliners.
Advancing issues outnumbered declining ones on the NYSE by a
3.12-to-1 ratio; on Nasdaq, a 2.73-to-1 ratio favored advancers.
The S&P 500 posted 57 new 52-week highs and one new low; the
Nasdaq Composite recorded 82 new highs and 37 new lows.
(Reporting by Noel Randewich Additional reporting by Shreyashi Sanyal
and Aparajita Saxena in Bengaluru Editing by Leslie Adler)
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