US shares advanced early Tuesday, lifted by tech stocks as China put some life back to the yuan, a day after Wall Street was shaken by its biggest one-day percentage-loss for the year.
Wall Street's main index rallied more than one percent from a massive sell-off as China stabilized its yuan, easing worries that currencies would be the next battleground in the China-US trade conflict.
Nasdaq and the benchmark S&P 500 shed at least 3.1% each late on Monday, after the yuan's devaluation which forced the US President Donald Trump to label China as a "currency manipulator" for deliberately letting its currency fall to more than a decade low.
"The fact that Beijing stabilized the yuan gives investors some hope that this will not escalate into a bigger problem," Rick Meckler, partner at Cherry Lane Investments, said. "Any positive reaction by either side that suggests willingness to negotiate is really going to be taken well by investors," he added.
Analysts said China's overnight intervention is a sign that the government wants to keep their currency stable and elevated. But the move also shows how fast things can change. "It's permeating the tone in the market, and it is among the reasons there remains a sense of trepidation," Quincy Krosby, Prudential Financial chief market planner, said.
The S&P technology index (SPLRCT), which is comprised of companies that have a big presence in the Chinese market, and were among heavily battered during Monday's sell-off, provided the badly-needed lift to the S&P index, climbing 1.71%.
The Dow Jones Industrial Average (DJIA) rose 88.56 points, or 0.36%, at 25,804.30. The latest round of declines has dragged the S&P 500 away from its all-time peak reached in July this year. After the bell, stocks of Walt Disney were down 2.7% after the release of the company's quarterly sales.
Apple Inc increased 1.1% following three days of heavy declines, while Philadelphia Semiconductor index rallied 0.92%. Other stocks like videogame maker Take-Two Interactive Software Inc advanced 8.6% after it elevated its full-year revenue estimate.
Advancing issues outweighed the losing ones on the New York Stock Exchange by a ratio of 2.15-to-1; on Nasdaq, a ratio of 1.84-to-1 favored the gainers. The Nasdaq Composite registered 22 new highs and 199 new lows.
The materials sector was down 0.77%, dragged by around 10% loss in scent and flavor manufacturer International Flavors & Fragrances and fertilizer company Mosaic Co after both firms slashed their full-year earnings projections.
