US STOCKS-Wall Street rises as investors weigh tariff exemptions

By Lisa Pauline Mattackal and Purvi Agarwal

April 14 (Reuters) - Wall Street's main indexes rose on Monday but were well off session highs as an early rally in technology stocks after the White House exempted smartphones and computers from new tariffs gave way to worries about economic growth and future levies.

The United States unveiled the exemptions on Friday, but President Donald Trump said he would announce tariff rates for imported semiconductors later in the week.

The exempted tech products will face new duties within the next two months, U.S. Commerce Secretary Howard Lutnick said. These product categories make up about 20% of U.S. imports from China, according to Deutsche Bank.

Indexes had jumped at the open, with the tech-heavy Nasdaq .IXIC up over 2%, but they pared gains in late morning trading.

"We're continuously told by the (Trump) administration that these pauses are temporary and they're not concessions long term... the market is grappling with that," said Quint Tatro, chief investment officer, Joule Financial.

Apple AAPL.O was up 2.2%, while PC maker HP HPQ.N and retailer Best Buy BBY.N gained 1.5% and 1.8%, respectively.

Most other megacap stocks reversed course, with Nvidia NVDA.O falling 0.8% and Amazon.com AMZN.O down 1.9%, while the Philadelphia SE Semiconductor index .SOX was 0.4% lower.

At 12:05 p.m. the Dow Jones Industrial Average .DJI rose 110.00 points, or 0.27%, to 40,322.71, the S&P 500 .SPX gained 20.44 points, or 0.38%, to 5,383.78, and the Nasdaq Composite .IXIC gained 35.29 points, or 0.21%, to 16,759.75.

The tariff exemptions on certain electronics, while welcome, are emblematic of Trump's back-and-forth trade policies that have escalated tensions between the U.S. and China and triggered the wildest swings on Wall Street in years.

The S&P 500 .SPX notched its biggest weekly gain on Friday since November 2023, after its worst selloff since 2020 the week before that. The index has dropped more than 5% since April 2's "Liberation Day" tariff announcement.

The CBOE Volatility Index .VIX, Wall Street's "fear gauge", eased from eight-month highs hit last week and was last at 32.95.

With markets closed on Good Friday, the shorter trading week ahead will be scrutinized for signs on how policymakers, businesses and consumers assess the economic outlook amid such policy uncertainty.

Goldman Sachs' GS.N shares rose 1% after the bank reported higher first-quarter profit. Quarterly earnings from companies including Netflix NFLX.O are also on the radar this week.

Citigroup downgraded U.S. equities to "neutral" from "overweight" on expectations that tariffs would hit earnings growth.

"We have the tariffs we're dealing with, but we also have a backdrop of a concerning economic environment, which ultimately can equate to (a) slowdown in earnings," Tatro said.

Among other stocks, obesity drugmakers gained after Pfizer PFE.N said it would end the development of its experimental weight-loss pill. Eli Lilly LLY.N and Viking Therapeutics VKTX.O were up 1.4% and 7.6%, respectively.

Commentary from U.S. Federal Reserve Chair Jerome Powell and retail sales data for March, both expected on Wednesday, will also be closely watched.

Advancing issues outnumbered decliners by a 2.3-to-1 ratio on the NYSE, and by a 1.4-to-1 ratio on the Nasdaq.

The S&P 500 posted one new 52-week high and no new lows, while the Nasdaq Composite recorded 23 new highs and 72 new lows.