Trader Robert Charmak works on the floor of the NYSE...

Trader Robert Charmak works on the floor of the NYSE on Friday.  Credit: AP / Richard Drew

Stocks closed modestly higher Monday after shedding most of the gains from an early rally spurred by the Trump administration's decision to hold off on increasing tariffs on imported Chinese goods.

Investors welcomed the move, which averted an escalation in the damaging trade war between the world's two largest economies. The fight is over U.S. complaints that Beijing steals technology or pressures companies to hand it over.

Traders have been growing increasingly optimistic over the last two weeks that the U.S. and China are moving closer to a resolution of their dispute. That's helped lift stocks in recent weeks, gains which some analysts say suggest the market is already viewing an agreement as a done deal.

"You can attribute much of today's gains to trade," said Lindsey Bell, investment strategist at CFRA. "The closer we get to a deal getting done or some agreement being made, the smaller the gains are becoming."


The S&P 500 index added 0.1 percent, to 2,796.11. The benchmark index has finished higher the past four weeks in a row.

The Dow Jones Industrial average gained 60.14 points, or 0.2 percent, to 26,091.95. Earlier in the day it was up more than 209 points.

The Nasdaq composite rose 0.4 percent, to 7,554.46. The Russell 2000 index of smaller companies dropped 0.1 percent, to 1,588.81. -- AP

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