Stocks higher after worst week in two years
NEW YORK — Stocks are powering higher Monday as the market claws back some of its massive losses last week, when it slumped into a ‘correction’ for the first time in two years. The Dow Jones industrials were up more than 400 points. Technology companies and banks, some of the biggest winners on the market over the past year, are up the most. European markets are also higher.
The Standard & Poor’s 500, the benchmark for many index funds, gained 37 points, or 1.4 per cent, to 2,656 as of 1:40 p.m. Eastern time. The Dow rose 424 points, or 1.8 per cent, to 24,615. The Nasdaq composite climbed 98 points, or 1.4 per cent, to 6,973. The Russell 2000 index of smallercompany stocks advanced 12 points, or 0.8 per cent, to 1,490.
It took just nine days for stocks to plunge 10 per cent from their latest peak, which was reached on Jan. 26. A drop of that size is known on Wall Street as a market “correction.” According to LPL Financial, it was the swiftest move from a record high to a correction in the history of the S&P 500. The index rose 1.5 per cent Friday but still wound up with its worst weekly loss in more than two years.
Despite the two-day recovery, the S&P 500 is down 7.5 per cent from its recent high, and investors expect far more volatility in the stock market than they did two weeks ago.
Defence contractor General Dynamics will spend almost $7 billion to acquire internet technology company CSRA. The Trump administration has been pushing defence spending aggressively higher. CSRA climbed $9.58, or 31.1 per cent, to $40.40 Monday. General Dynamics added 23 cents to $212.33.
Keeping score: Defence deal:
Retailers, apparel makers and other companies that focus on consumers made some of the largest gains. They held up relatively well during the steep downturn over the last two weeks, a sign that investors expect shoppers to keep spending and the economy to keep growing. On Monday General Motors picked up 57 cents, or 1.4 per cent, to $42.04 and Netflix climbed $5.40, or 2.2 per cent, to $254.87. It’s up 33 per cent since the beginning of the year.
Restaurant Brands International, the owner of Burger King and Tim Hortons, jumped $3.80, or 6.7 per cent, to $60.31 after a strong fourth-quarter report, and McDonald’s gained $3.24, or 2 per cent, to $164.04.
Technology companies also rose. They have slumped recently after winning a big portion of the market’s gains over the last year. Apple gained $6.13, or 3.9 per cent, to $162.54 while Cisco Systems rose $1.13, or 2.9 per cent, to $40.66. Chipmaker Applied Materials climbed 95 cents, or 2 per cent, to $49.03.
Benchmark U.S. crude gained 62 cents, or 1 per cent, to $59.82 a barrel in New York. Brent crude, used to price international oils, advanced 43 cents to $63.22 a barrel in London.
Hess added $1.68, or four per cent, to $43.80 and Occidental Petroleum picked up $2.01, or 2.9 per cent, to $70.19.
Oil prices have dropped since reaching longtime highs in late January, when U.S. crude peaked at $66 a barrel. The S&P 500 energy index is down 12 per cent over the last month.
Gainers: Energy: Fox hunt?
Twenty-First Century Fox picked up 89 cents, or 2.5 per cent, to $36.62 after The Wall Street Journal reported that cable and internet provider Comcast is still interested in buying Fox’s entertainment divisions and could make another offer. Disney agreed to buy Fox’s movie and television studios and some cable and international TV businesses in December for about $52.4 billion in stock. Comcast also reportedly had talks with Fox.
Comcast stock slipped seven cents to $35.80 while Disney added 33 cents to $103.42.
Bond prices edged higher. The yield on the 10-year Treasury note stayed at 2.86 per cent.
High dividend companies continued to struggle. Real estate investment trusts declined and utilities didn’t do as well as the rest of the market. They have taken bigger losses than any other S&P 500 sectors this year. Hospital property company HCP fell 38 cents, or 1.67 per cent, to $22.83 and Boston Properties shed $1.48, or 1.3 per cent, to $113.87.
Investors will watch U.S. inflation and retail sales figures on Wednesday particularly closely as they review monthly reports from the U.S. Department of Labor and the National Retail Federation. Inflation in particular will be of interest as it could affect expectations of more rate increases the Federal Reserve. Fears of more aggressive interest rate hikes were one of the triggers of last week’s stock market sell-off.
The dollar rose to 108.59 yen from 108.53 yen. The euro rose to $1.2275 from $1.2231.
Gold rose $10.70 to $1,326.40 an ounce. Silver jumped 43 cents, or 2.7 per cent, to $16.57 an ounce. Copper added 5 cents, or 1.7 per cent, to $3.09 a pound.
Germany’s DAX jumped 1.4 per cent while the CAC 40 in France and the British FTSE 100 both advanced 1.2 per cent.
Hong Kong’s Hang Seng lost 0.2 per cent and Seoul’s Kospi rose 0.9 per cent. Markets in Japan were closed for a holiday.
Bonds: Week ahead: Currencies: Metals: Overseas: