Stocks edge up as tariff fears recede

NEW YORK - U.S. stocks ended the day on a high note, a sign investors think President Donald Trump's tariffs on steel and aluminum imports will be less harsh than feared.

Mr. Trump signed proclamations imposing the tariffs at the White House Thursday afternoon. The levies — 25 percent on steel imports and 10 percent on aluminum imports — will take effect in 15 days. The move had been opposed by congressional Republicans as well as many business leaders and economists, who warned that the tariffs could ignite a trade war with U.S. trading partners. 

Stocks had slumped early Wednesday as investors interpreted the departure of Trump economic adviser Gary Cohn, along with Mr. Trump's comments about an intellectual property dispute with China, as indications the administration intended to take a harder line on trade in the future. 

Although there remains confusion over exactly what the president's proclamation will do, financial markets rose. The Standard & Poor's 500 index climbed 12 points, or 0.4 percent, to close at 2,739. The Dow Jones industrial average rose and Nasdaq also gained. 

 A senior administration official told reporters Thursday afternoon that Mexico and Canada will temporarily be exempt from the tariffs, but Mr. Trump said those carve-outs are contingent on a successful renegotiation of the North American Free Trade Agreement.

Among sectors, health care companies were broadly higher as health insurer Cigna agreed to buy pharmacy benefits manager Express Scripts for $52 billion

Pharmacy benefit managers run drug plans for insurers and employer-based plans. Like health insurers, they have struggled to corral spiraling costs, so in the last few years several big health insurers have created their own pharmacy benefits management businesses or bough them. And late last year, drugstore chain and pharmacy benefits manager CVS agreed to buy insurer Aetna for $69 billion.

Although investor panic seemed to subside about the potential impact of the tariffs, over the longer term it remains to be seen how affected countries will react. Wall Street analysts and other market watchers warn that a turn toward economic nationalism could spark retaliation, and ultimately result in a loss of American jobs. 

"Fears are growing that recent developments in the U.S., including the imposition of tariffs on steel and aluminium as well as the apparent ascendancy of economic nationalists within the White House, may represent the start of a more fundamental shift towards protectionism," research firm Capital Economics said in a note to clients on Thursday.