Wall Street opens higher as Xi soothes trade war fears

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(Reuters) – Wall Street opened higher on Tuesday after Chinese President Xi Jinping promised to cut import tariffs, soothing investor concerns about rising U.S.-China trade tensions.

Ten of the 11 major SP sectors were higher, with technology and energy stocks leading the gainers. The three major U.S. indexes were all up more than a percent with all 30 Dow components in the positive territory.

In his first public comments since the trade dispute with the Trump administration started, Jinping vowed to open the country’s economy and said China would raise the foreign ownership limit in automobile, shipbuilding and aircraft sectors “as soon as possible”.

His comments buoyed global markets, which have been under pressure as China and the United States threatened each other with billion in tariffs and investors feared that protectionist measures would hit global economic growth.

Energy stocks gained as oil broke above $70 a barrel on easing trade war fears between the world’s two largest economies. [O/R]

“The expectation was this could have gone one of two ways: he could have been aggressive about U.S. tariffs or been conciliatory and it feels like he’s more conciliatory,” said Art Hogan, chief market strategist at Wunderlich Securities in New York.

Shares of major U.S. automakers such as General Motors (GM.N), Ford (F.N), Fiat Chrysler (FCAU.N) and Tesla (TSLA.O) were up between 2 percent and 3 percent following Xi’s comments.

At 9:54 a.m. ET the Dow Jones industrial average .DJI was up 317.16 points, or 1.32 percent, at 24,296.26.

FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 29, 2018. REUTERS/Brendan McDermid

The SP 500 .SPX was up 28.34 points, or 1.08 percent, at 2,641.5 and the Nasdaq Composite .IXIC was up 70.79 points, or 1.02 percent, at 7,021.14.U.S. stocks will face a major test in coming weeks as first-quarter earnings pour in. Big banks such as JPMorgan Chase (JPM.N), Citigroup (C.N) and Wells Fargo (WFC.N) will kick off the earnings season with their results on Friday.

Analysts expect quarterly profits for SP 500 companies to rise 18.5 percent from a year ago, which would be the biggest gain in seven years, according to Thomson Reuters I/B/E/S.

Facebook Inc (FB.O) shares erased premarket gains and were marginally down ahead of CEO Mark Zuckerberg’s testimony before U.S. lawmakers on Tuesday and Wednesday.

The CEO is expected to strike a conciliatory tone in an attempt to blunt possible regulatory fallout from the privacy scandal engulfing his social network.

Shares of Nvidia (NVDA.O) rose 4 percent after Morgan Stanley raised the stock to “overweight”.

Verifone Systems (PAY.N) shares rose 52 percent after the company agreed to be taken private for $2.28 billion.

Advancing issues outnumbered decliners on the NYSE for a 5.99-to-1 ratio on the upside and on the Nasdaq for a 3.68-to-1 ratio favoring advancers.

The SP 500 index showed two new 52-week highs and no new lows, while the Nasdaq recorded 20 new highs and 12 new lows.

Reporting by Sweta Singh in Bengaluru; Editing by Arun Koyyur

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