Home Depot reverses course after gaining premarket; Tyson Foods falls after sales miss
U.S. stocks rose on Tuesday as technology stocks bounced back after a steep selloff in the previous session and hopes of progress in the U.S.-China trade talks boosted industrials, even though a decline in Apple Inc curbed gains.
The S&P technology index rose 0.6 per cent following three days of losses, but shares of Apple edged 1.3 per cent lower, entering its fourth day in the red.
Also helping the markets was a report that said China's top trade negotiator was preparing to visit the United States before a meeting between the leaders of the world's two largest economies.
The trade-sensitive industrial sector rose 0.5 per cent, boosted by shares of Caterpillar Inc and United Technologies Corp.
"It seems like some pressure regarding trade has been alleviated," said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey. "However, the market will take a defensive posture until visibility increases with regard to trade."
The development comes as China President Xi Jinping and U.S. President Donald Trump plan to meet on the sidelines of a G20 summit that is being held in Argentina at the end of November.
The main indexes tumbled in the previous session on Monday as shares of Apple slid 5 per cent after several suppliers to the iPhone maker cut their forecasts, signalling that demand for the phones could be softening.
Following that, Goldman Sachs cut its earnings estimate for Apple and another key supplier Foxconn reported a weaker-than-expected rise in quarterly profit.
After a stellar rally for technology shares that has fueled a decade-long gain for U.S. stocks, appetite for the group has started to wane lately on concerns about tighter regulation and demand for chipmakers.
Allocation to the global tech sector collapsed to the lowest since February 2009, according to a Bank of America Merrill Lynch survey that also showed the S&P 500 index was broadly expected to rise 12 per cent more before peaking.
At 10:01 a.m. EDT the Dow Jones Industrial Average was down 54.28 points, or 0.21 per cent, at 25,332.90, the S&P 500 was up 4.76 points, or 0.17 per cent, at 2,730.98 and the Nasdaq Composite was up 14.96 points, or 0.21 per cent, at 7,215.83.
The Dow was weighed down by shares of Home Depot Inc, which reversed course to fall 0.9 per cent following the No.1 home improvement chain's results. Boeing Co's shares also fell 3.5 per cent.
Nine of the 11 major S&P sectors were higher, but the energy index was lower as oil prices fell more than 2 per cent and utility sector. also declined.
Advance Auto Parts Inc rose 8.9 per cent after the company raised full-year sales forecast and reported better-than-expected third-quarter results.
Meat processor Tyson Foods Inc fell 6 per cent after its fourth-quarter revenue fell short of Wall Street estimates, hit by lower demand for chicken.
Advancing issues outnumbered decliners for a 1.89-to-1 ratio on the NYSE and a 1.95-to-1 ratio on the Nasdaq.
The S&P index recorded 4 new 52-week highs and seven new lows, while the Nasdaq recorded 6 new highs and 54 new lows.
(With inputs from agencies.)