(Reuters) – U.S. stocks bounced back on Tuesday, led by gains in technology shares, as China stepped in to stabilize the yuan, a day after Wall Street’s main indexes racked up their steepest one-day percentage fall of the year.
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., August 5, 2019. REUTERS/Brendan McDermid
The benchmark S&P 500 .SPX and Nasdaq .IXIC lost at least 3% each on Monday, their sixth straight day of losses, after China let the yuan drop sharply, prompting the U.S. Treasury Department to label Beijing as a currency manipulator.
China’s move to fix the yuan at a slightly stronger rate overnight, however, allayed fears of an escalating trade war, which has been fueled by President Donald Trump’s threat to slap a new round of tariffs on Chinese imports last week.
“The fact that China stabilized its currency gives investors some hope that this won’t accelerate into a bigger problem,” said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
“Any positive response by either side that suggests some willingness to negotiate is really going to be taken well by investors.”
Also helping the sentiment were comments from White House economic adviser Larry Kudlow that Trump wants to continue trade talks with China and still plans to host a Chinese delegation for further talks in September.
At 9:49 a.m. ET, the Dow Jones Industrial Average .DJI was up 158.31 points, or 0.62%, at 25,876.05, the S&P 500 .SPX was up 20.49 points, or 0.72%, at 2,865.23. The Nasdaq Composite .IXIC was up 79.27 points, or 1.03%, at 7,805.31.
The technology sector .SPLRCT, which includes companies that have a big exposure to China and were at the heart of Monday’s selloff, rose 1.42%, the most among major S&P sectors.
Apple Inc (AAPL.O) gained 1.5% after three days of heavy losses, while Philadelphia SE semiconductor index .SOX climbed 1.53%.
Among other stocks, videogame publisher Take-Two Interactive Software Inc (TTWO.O) jumped 8.6% after raising its full-year revenue forecast.
Payments processor Mastercard Inc (MA.N) gained 2.2% after it said it would buy a majority of the corporate services businesses of Scandinavian payments group Nets for about $3.19 billion.
Walt Disney Co (DIS.N) was up 0.7% ahead of its results after market close.
The latest streak of losses has pulled the S&P 500 about 6% away from its all-time high hit last month.
Advancing issues outnumbered decliners by a 2.57-to-1 ratio on the NYSE and by a 3.21-to-1 ratio on the Nasdaq.
The S&P index recorded two new 52-week highs and nine new lows, while the Nasdaq recorded 10 new highs and 36 new lows.
Reporting by Medha Singh and Arjun Panchadar in Bengaluru; Editing by Anil D’Silva