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Wall Street edges higher as tech offsets healthcare loss

The S&P 500 index hit a record high last week, boosted by rising expectations that the Federal Reserve would cut interest rates.

Reuters|
Jun 24, 2019, 09.05 PM IST
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AFP
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US stocks posted slight gains on Monday, as technology stocks more than offset a decline in healthcare sector, while investors awaited a high-stakes meeting between U.S. and Chinese leaders at the G20 summit later this week.

The S&P 500 index hit a record high last week, boosted by rising expectations that the Federal Reserve would cut interest rates and optimism over a revival in trade talks between the United States and China.

Presidents Donald Trump and Xi Jinping are expected to meet at the G20 summit on June 28-29 in Japan.

"Markets are generally optimistic about the fact that both sides are continuing to meet, talk, discuss and debate tariffs, and so there's still the potential for progress," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

"Don't think markets are expecting a deal, but at least as long as there's dialogue, there's hope for progress."

The trade-sensitive industrial sector edged 0.2% higher. But the biggest boost to the markets came from the technology sector, which rose 0.24%.

Countering the gains, healthcare sector dropped 0.42%, weighed by a 4.6% decline in shares of Celgene Corp and a 7% fall in those of Bristol-Myers Squibb Co .

Bristol-Myers said its planned $74 billion deal to buy drugmaker Celgene was expected to close at the end of 2019 or beginning 2020, compared with its earlier expectations of closing the deal in the third quarter.

At 10:30 a.m. ET the Dow Jones Industrial Average was up 61.00 points, or 0.23%, at 26,780.13, the S&P 500 was up 3.17 points, or 0.11%, at 2,953.63 and the Nasdaq Composite was up 4.51 points, or 0.06%, at 8,036.22.

Also weighing on sentiment was rising tensions between the United States and Iran, after Tehran shot down an American drone last week.

Trump said on Sunday he was not seeking war with Iran after a senior Iranian military commander warned any conflict in the Gulf region could spread uncontrollably and threaten the lives of U.S. troops.

The financial sector rose 0.39% after the 18 largest banks operating in the United States cleared the first stage of their yearly health checks with the U.S. Federal Reserve that assess their ability to weather a major economic downturn.

Among other stocks, shares of casino operator Caesars Entertainment Corp jumped 14.5% after rival Eldorado Resorts Inc said it agreed to buy the company for $8.5 billion. Shares of Eldorado fell 9%.

United Technologies Corp gained 0.78% after Cowen & Co upgraded shares of the building and aerospace supplier to "outperform" from "market perform".

Advancing issues outnumbered decliners by a 1.16-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.18-to-1 ratio on the Nasdaq.

The S&P index recorded 26 new 52-week highs and three new lows, while the Nasdaq recorded 34 new highs and 37 new lows.
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