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US close: Street finishes higher as investors express trade war relief
Wall Street finished the first session of the week higher on Monday, as investors welcomed an easing of tensions between the US and China, with deal news in focus.
The Dow Jones Industrial Average finished up 1.21% at 25,013.29, the S&P 500 was ahead 0.74% at 2,733.01, and the Nasdaq 100 added 0.57% to 6,905.53.
Investors breathed a sigh of relief after US Treasury Secretary Steve Mnuchin said over the weekend that the US would hold off from imposing tariffs on China, which had originally sparked fears of a trade war between the two.
Mnuchin said that a trade war was "on hold" as both countries agree to work on a wider trade agreement.
Washington has lifted plans to impose tariffs on up to $150bn of Chinese imports in response to a promise from China to "significantly increase" its purchases of US farm and energy exports.
"The Dow surged more than 300 points after the bell rang on Wall Street, a chunky addition that took the index back across the 25000, a level that had eluded the index last Monday, for the first time since mid-March," noted Connor Campbell, a financial analyst at SpreadEx.
"The dollar also remained chipper, its half a percent rise against the pound complimented by a similar 0.5% jump against the yen and a 0.2% increase against the euro."
London Capital Group analyst Jasper Lawler was warning caution over the US-China matter, however,, telling clients: "This is by no means the end of the matter, especially given the huge gap that remains between the two sides, as highlighted by the lack of any real detail in the announcement.
"However, this was the encouraging start to talks that traders were after."
On the data front, the Chicago Fed National Activity Index came in at 0.34 in April, up slightly from the 0.32 reading recorded in March, but short of the 0.48 projected by analysts, however, the index remained above the six and 12-month averages.
It was below the three-month average but generally seen as being comfortably above the 0.0 level.
Deal news was in focus, with General Electric picking up 1.87% in early trade after agreeing to sell GE Transportation to Wabtec in a deal valued at $11.1bn.
Meanwhile, IT services provider Roper Technologies dipped reversed earlier losses to finish up 2.04% after announcing it was buying software company PowerPlan in an all-cash deal valued at $1.1bn, while Fifth Third Bancorp dropped 7.93% after agreeing to buy Chicago's MB Financial in a deal valued at $4.7bn.
Caterpillar rose 2.11% to be among the Dow's leading gainers.
Elsewhere, shares of electric car maker Tesla picked up 2.77% after chief executive Elon Musk announced a new high-performance model 3 at $78,000.