US STOCKS-Wall Street bounces on softer trade tone

* All 11 major S&P 500 sectors in positive territory
* U.S. core capital goods orders rise; shipments tumble
* Dow up 0.57%, S&P 500 up 0.61%, Nasdaq up 0.85%

(Updates to mid-afternoon, changes byline)
By Chuck Mikolajczak
NEW YORK, Aug 26 (Reuters) - U.S. stocks rose on Monday, as
major indexes bounced following a sharp sell-off in the prior
session, as U.S. President Donald Trump forecast a trade deal
with China and somewhat cooled investor concerns after a ramp up
in combativeness derailed markets last week.
Trump said after a G7 summit of world leaders in Biarritz,
France, that he believed China was sincere about the desire to
reach a deal, citing what he described as increasing economic
pressure on Beijing and job losses there. Shares of tariff-sensitive companies rose in response, with
Apple Inc's AAPL.O 1.40% gain providing the biggest boost to
each of the major indexes.
Chipmakers, which are heavily reliant upon China for
revenue, also rose with the Philadelphia Semiconductor index
.SOX adding 0.66% after dropping more than 4% on Friday.
Still, market participants noted the rebound was less
dramatic than the drop in markets last week, and they expected
recent volatility to continue.
"Six months ago, those sorts of comments would've weighed
more heavily so there is some degree of the market looking past
it and wanting some proof at this point," said Willie Delwiche,
investment strategist at Robert W. Baird in Milwaukee.
"So you've got a great deal of uncertainty with Trump, the
Fed, the economy and so investors are unsettled and are nervous
so it is 'shoot first, ask questions later' kind of mentality
right now."
The Dow Jones Industrial Average .DJI rose 144.97 points,
or 0.57%, to 25,773.87, the S&P 500 .SPX gained 17.34 points,
or 0.61%, to 2,864.45 and the Nasdaq Composite .IXIC added
65.86 points, or 0.85%, to 7,817.63.
Commerce Department data showed new orders for key U.S.-made
capital goods rose modestly in July, while shipments fell by the
most in nearly three years. The report which could provide the
Federal Reserve with more fuel to cut interest rates again next
month. Concerns about the global economy slipping into recession
and uncertainty over the pace of U.S. interest rate cuts have
created some anxiety about how long the current U.S. expansion
will last. The S&P 500 is now off more than 5% from its record
high hit in late July after suffering its longest run of weekly
declines since May.
Even with broad gains on Monday that saw all 11 S&P 500
sectors rise, Wall Street's fear gauge, the CBOE Volatility
index .VIX , hit its highest level in more than a week earlier
in the session.
Among other stocks, Celgene Corp CELG.O rose 2.70% after
Amgen Inc AMGN.O said it would buy the company's psoriasis
drug Otezla, clearing the way for Bristol-Myers Squibb Co
BMY.N to go ahead with its $74 billion deal for Celgene.
Shares of Bristol-Myers rose 2.71% Advancing issues outnumbered declining ones on the NYSE by a
1.66-to-1 ratio; on Nasdaq, a 1.74-to-1 ratio favored advancers.
The S&P 500 posted four new 52-week highs and 17 new lows;
the Nasdaq Composite recorded 17 new highs and 134 new lows.