US STOCKS-Tech leads Wall St higher as tariff delay sparks rally

Reuters

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    * Tech leads all three major averages higher
    * Apple jumps on announced tariff deal
    * Treasury yield curve hits flattest in 12 years
    * Indexes up: Dow 1.44%, S&P 1.47%, Nasdaq 1.95%

 (Updates to market close)
    By Stephen Culp
    NEW YORK, Aug 13 (Reuters) - U.S. stocks closed higher on
Tuesday after an announced delay of planned tariffs on some
Chinese imports brought buyers back to the equities market in a
broad-based rally.
    Tech stocks, headed up by Apple Inc  AAPL.O , led all three
major U.S. indexes into the black following the announcement,
which calmed fears over the U.S.-China trade war and growing
signs of imminent recession.
    U.S. Trade Representative Robert Lighthizer said the United
States would hold off on imposing additional 10% tariffs on key
Chinese goods, including laptops and cellphones, tariffs that
were originally set to go into effect next month.  urn:newsml:reuters.com:*:nL2N2590HM
    "It's a stemming of the downward momentum because it does
give some trade optimism," said Joseph Sroka, chief investment
officer at NovaPoint in Atlanta. "We're getting into the tail
end of earnings season, so geopolitical and macroeconomic news
will dominate the markets direction for the next few weeks."  
    Apple, a likely beneficiary of the tariff delay, rose 4.2%
on Nasaq, while the Philadelphia SE Semiconductor Index  .SOX 
gained 3.0%.
    In economic news, U.S. consumer prices  USCPFY=ECI 
accelerated in July, with core CPI, which strips out volatile
food and energy prices, growing at 2.2% year-on-year, its
largest gain in six months and well above the U.S. Federal
Reserve's 2% target.  urn:newsml:reuters.com:*:nL2N2581H9
    The healthy inflation reading is unlikely to change market
expectations for another interest rate cut from the Fed next
month as it grapples with the U.S.-China trade war and its
economic fallout.
    "Trade issues could really disrupt economic growth," Sroka
added. "And if the Fed cuts (interest) rates in September, it
could be considered a safety net, to be proactive rather than
waiting until it's too late."
    The spread between 2-year and 10-year U.S. Treasuries hit
its flattest level in 12 years, reflecting anxieties over trade
and geopolitical turmoil. But yields rose across the board on
news of the tariff delay.  urn:newsml:reuters.com:*:nL2N25911L 
    The Dow Jones Industrial Average  .DJI  rose 372.54 points,
or 1.44%, to 26,279.91, the S&P 500  .SPX  gained 42.48 points,
or 1.47%, to 2,926.23 and the Nasdaq Composite  .IXIC  added
152.95 points, or 1.95%, to 8,016.36.
    All of the 11 major sectors in the S&P 500 closed in the
black, with technology  .SPLRCT  and consumer discretionary
 .SPLRCD  seeing the biggest percentage gains.
    Toys and footwear were among the Chinese goods temporarily
spared from additional tariffs. 
    Nike Inc  NKE.N  rose 2.0%, while toymakers Hasbro Inc
 HAS.O  and Mattel Inc  MAT.O  advanced 2.7% and 4.6%,
respectively.
    Facebook Inc  FB.O  pared gains following a Bloomberg report
that the social media company had hired outside contractors to
transcribe user audio clips, ending up 1.7%.  urn:newsml:reuters.com:*:nL4N2593Y3
    Shares of CBS Corp  CBS.N  and Viacom Inc  VIAB.O  gained 
1.4% and 2.4%, respectively, after sources told Reuters the
companies had reached an agreement in principle regarding their
impending merger.  urn:newsml:reuters.com:*:nL4N25931O 
    The second-quarter earnings season has reached the final
stretch, with 453 of the companies in the S&P 500 having posted
results. Of those, 73.3% beat consensus estimates, according to
Refinitiv data.
    Analysts see S&P 500 second-quarter earnings growth of 2.9%
year-on-year, a significant improvement over the paltry 0.3%
growth expected on July 1, per Refinitiv. 
    Advancing issues outnumbered declining ones on the NYSE by a
2.46-to-1 ratio; on Nasdaq, a 2.30-to-1 ratio favored advancers.
    The S&P 500 posted 31 new 52-week highs and 18 new lows; the
Nasdaq Composite recorded 60 new highs and 128 new lows.  
    Volume on U.S. exchanges was 7.95 billion shares, compared
with the 7.34 billion-share average over the last 20 trading
days.

 (Reporting by Stephen Culp; editing by Jonathan Oatis)
 ((stephen.culp@thomsonreuters.com; 646-223-6076;))

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