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Wall Street buoyed by hopes of easing US-China trade tensions

May 15 2018 10:05

New York - Wall Street closed higher on Monday, within investors extending last week's gains amid signs of easing trade tensions between Washington and Beijing.

Meanwhile, European stocks drifted as markets awaited the formation of a right-wing coalition government in Italy.

A Sunday tweet from US President Donald Trump that American and Chinese officials were working to get Chinese telecom equipment maker ZTE "back into business, fast," helped soothe some investors' nerves, after they were rattled by fears of conflict over trade and new sanctions against Iran.

Ahead of meetings this week with Chinese officials in Washington, US Commerce Secretary Wilbur Ross said Monday he was exploring "alternative remedies" for ZTE, which was hit with a seven-year ban last month on acquiring crucial US technology, causing it to cease operations.

Art Hogan of Wunderlich Securities told AFP that Wall Street always welcomes signs of easing trade tensions.

"Anytime you get a dent on that concern, the market seems to rally and that is helping today," he said. "Nothing concrete necessarily, but a glimmer of hope."

"Trade policy concerns have certainly been a headwind for markets in 2018," he added.

The Dow Jones Industrial Average added 0.3%, its eight straight positive finish, while the S&P 500 and Nasdaq rose 0.1% each.

In Italy, Europe's third-largest economy, a deeply eurosceptic far-right party and an anti-establishment group had been due to unveil a coalition government agreement and name a new prime minister.

But two months of political deadlock seemed set to continue after the leader of the Five Star Movement emerged from a meeting with President Sergio Mattarella and said key differences remained with the far-right Northern League.

Milan closed up 0.4% while London and Frankfurt rose 0.2% and Paris was flat.

Investors will be keeping a close eye on US-China trade discussions, with President Xi Jinping's top economics official, Vice Premier Liu He, visiting Washington.

"Global trade tensions remain in focus but comments and developments regarding the US and Chinese relations appear to be fostering some cautious optimism," Charles Schwab analysts said in a note.

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equities  |  wall street  |  markets
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