Wall Street’s major domestic equity indexes rose on Monday, as a softer stance on Chinese tariffs powered a rebound from last week’s selloff, but stocks pared much of their gains late in the session after a report that the Federal Bureau of Investigation raided the office of President Donald Trump’s lawyer.
Technology and health stocks led the benchmark S&P 500’s major sectors. Merck & Co was the greatest addition to the Dow Jones Industrial Average, while gains in Apple led the Nasdaq index.
Stocks climbed after Trump’s new economic adviser Larry Kudlow told CNBC that the president may be open to forming an international coalition to grapple with trade issues involving China.
Investors will look for further signs of China’s stance on trade relations when Chinese President Xi Jinping speaks at the Boao Forum economic conference on Tuesday.
However, stocks began paring gains late in the afternoon, a downward trend that accelerated after a report that the FBI had raided the New York office of Michael Cohen, Trump’s personal lawyer, upon a referral by Special Counsel Robert Mueller.
Investors are looking forward to the start of earnings season to provide a sustained lift to markets, with big banks, such as JPMorgan Chase, Citigroup and Wells Fargo are set to report first-quarter results on Friday.
The consensus appears to be that quarterly earnings for S&P 500 companies will be about 18.5 percent higher when compared to a year ago, which would be the biggest gain in seven years, according to Thomson Reuters I/B/E/S.
AveXis rose 81.6 percent after Novartis offered to buy the gene therapy company for $8.7 billion.
Merck shares rose 5.2 percent after the company’s blockbuster cancer drug, Keytruda, met the main study goal of helping previously untreated lung cancer patients live longer.
Shares of Leucadia National rose 11.6 percent after the company said it would sell most of its non-financial assets to focus on investment banking and advisory services.
Approximately 6.28 billion shares changed hands on the major domestic equity exchanges, as compared to the 7.3 billion share average over the past 20 trading days.