Wall Street bounces higher as chip stocks gain

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Shares of companies such as Boeing Co, down 2.6 per cent, and Caterpillar Inc, down 2.3 per cent, have been under pressure as Trump's protectionist stance on steel and aluminum imports could increase costs and hamper sales overseas.

While Canada and Mexico are exempt from the tariffs, European countries are still seeking clarity so big industrial companies that could be affected by disruptions there - including Boeing and Caterpillar Inc. - were down, said Currie.

Persistent concern of a global trade war, after President Donald Trump implemented 25% tariff on steel imports and 10% on aluminium imports to the USA, also continued to weigh on investor sentiment.

"We've seen stable, modest wage growth, nothing that should be considered harmful for equity markets", she said.

The Dow Jones industrial average closed 171 points lower. The S&P 500.SPX is just 3 percent below the record highs hit on January 26 and the Dow.DJI is 4.8 percent away from its peak.

Despite recent gains the index is still down four per cent year to date, with Canada's markets still lacking the sparks of the USA economy, said Michael Currie, vice-president of TD Wealth Private Investment Advice.

The U.S. Treasury said in a letter to Singapore-based Broadcom that it had confirmed national security concerns about the bid and that the company had not given sufficient notice of its plans to redomicile in the United States.

Shares of Broadcom jumped 3.2 per cent after a Wall Street Journal report that Intel is considering bidding for the chip company, which has undertaken a hostile campaign to buy Qualcomm. Lumentum's shares rose 4.4 percent.

Oil prices traded lower as Brent crude futures fell 0.61 percent to trade at $65.09 per barrel, while US WTI crude futures declined 0.50 percent to trade at $61.73 a barrel. The UK's FTSE index was trading higher by 0.02 percent, while French CAC 40 Index rose 0.29 percent.

Advancing issues outnumbered decliners on the NYSE by 1,592 to 877.

Volume on USA exchanges was 6.52 billion shares, compared to the 7.2 billion average for the full session over the last 20 trading days.