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Stocks close higher on hopes for US-China trade talks

CNBC logo CNBC 5/14/2018 Fred Imbert Sam Meredith

Stocks ended higher Monday amid hopes of a potential breakthrough in trade tensions between the U.S. and China, the world's two largest economies.

The Dow gained 68 points, with UnitedHealth and Walmart the best performers. The 30-stock index also extended its winning streak to eight straight days. The S&P 500 gained 0.1 percent, with energy, health care and materials outperforming. The Nasdaq also advanced 0.1 percent.

President Donald Trump pledged Sunday to help Chinese technology firm ZTE Corp to "get back into business, fast" after a U.S. ban had significantly hampered the Asian company.

"For the President to become suddenly concerned about Chinese jobs is quite a volte-face," said Jonathan Fenby, the chairman of China research at TS Lombard. "The most probable explanation can only be that he wants to butter up Xi with a concession on the trade front to get China's help to make [North Korean leader] Kim Jong-un amenable to a deal at the Singapore summit, in an application of linkage he advanced last year of Korea and China trade issues."

Trump and Kim are scheduled to meet in Singapore on June 12. The encounter between the two leaders would mark the first-ever meeting between a U.S. president and a North Korean leader.

Optical component makers saw their stocks jump on Trump's ZTE news, with Oclar, Lumentum and Finisar rising. Acacia Communications also surged.

Chip stocks rose after a report said Chinese regulators will restart a review of the proposed acquisition of NXP Semiconductors by Qualcomm. NXP and Qualcomm stock rose. 

Equities came into the session riding last week's strong gains. The Dow posted its biggest weekly gain since March last week while the S&P 500 and Nasdaq climbed 2.4 percent and 2.7 percent, respectively.

In corporate news Monday, Xerox fell after the company abandoned a $6.1 billion deal with Japanese firm Fujifilm as part of a settlement between Carl Icahn and Darwin Deason.

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