February 25, 2019 / 7:38 PM / 8 months ago

US STOCKS-Trump talk that U.S.-China trade deal near pushes Wall St higher

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* Trump delays U.S. tariff hike on Chinese goods

* Tariff-exposed industrial, technology shares rise

* GE soars on sale of biopharma business for $21 bln

* Indexes up: Dow 0.52 pct, S&P 500 0.37 pct, Nasdaq 0.56 pct (Updates to late afternoon, adds comments, changes byline, Adds New York dateline)

By Sinéad Carew

NEW YORK, Feb 25 (Reuters) - U.S. stocks rose on Monday after President Donald Trump said he would delay a planned hike in tariffs on Chinese imports and that the two countries were "very, very close" to a trade deal.

But Wall Street's three major indexes pulled back from session highs as investors waited for new catalysts such as an actual deal with China.

Before the market opened on Monday, Trump said he was optimistic a final trade deal could be reached with China but cautioned that an agreement may still not happen.

The U.S. president's move to postpone the tariff deadline was seen as the clearest sign yet the two countries were closing in on an agreement to end their prolonged trade spat, which has slowed global growth and disrupted markets.

"The main driver for the market today is renewed optimism regarding a deal between the U.S. and China," said Adam Sarhan, chief executive officer of 50 Park Investments in New York.

But gains were capped after weeks of advances for the S&P 500, the Dow Jones Industrial Average and Nasdaq, partly due to trade optimism and dovish signals from the Federal Reserve.

"It would be perfectly normal to see the market pull back a little to digest the strong move. The market is waiting for the next bullish catalyst," said Sarhan.

At 2:04 p.m. EST (1904 GMT), the Dow Jones Industrial Average rose 134.83 points, or 0.52 percent, to 26,166.64; the S&P 500 gained 10.41 points, or 0.37 percent, to 2,803.08; and the Nasdaq Composite added 42.48 points, or 0.56 percent, to 7,570.03.

The S&P 500 index's session high on Monday was 4.3 percent below its record closing reached in late September.

Of the S&P's 11 major sectors, financials advanced most with a 1 percent gain as banks rose 1.4 percent, following U.S. Treasury yields higher.

The S&P technology index was up 0.6 percent, with the biggest boost from Apple Inc, gaining 0.7 percent. The Philadelphia semiconductor index climbed 1.3 percent as chip companies have a big exposure to China.

The industrials sector was 0.7 percent higher, with its biggest boost from General Electric Co, which leaped 11 percent after announcing a sale of its biopharma business to Danaher Corp for $21.4 billion. Danaher shares rose 8.2 percent.

The industrials sector was also helped by trade sensitive Caterpillar Inc's 2.7 percent jump and Boeing Co's 0.9 percent rise.

Helping the risk-on sentiment was a flurry of M&A activity.

The Nasdaq Biotechnology Index was up 2 percent with its biggest boost coming from Spark Therapeutics Inc whose shares soared 120 percent after Swiss drugmaker Roche Holding AG agreed to buy it for $4.3 billion.

Canadian miner Barrick Gold Corp offered to buy U.S. rival Newmont Mining Corp for nearly $18 billion. However, Newmont's shares dipped 0.2 percent as the offer price was at a discount.

The biggest laggards were the S&P's defensive sectors - consumer staples, utilities and real estate .

Advancing issues outnumbered declining ones on the New York Stock Exchange by a 1.40-to-1 ratio; on Nasdaq, a 1.48-to-1 ratio favored advancers.

The S&P 500 posted 58 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 121 new highs and 13 new lows. (Reporting by Sinead Carew in New York; Additional reporting by Shreyashi Sanyal, Amy Caren Daniel in Bengaluru; Editing by Anil D'Silva and Jeffrey Benkoe)

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