Tech, defense sectors lead stocks higher
NEW YORK — Strong gains for technology companies like software and chip makers helped lead U.S. stocks higher Monday. Defense contractors also climbed as the market continued to bounce back from a bout of turbulence last week.
Stocks rose for the third day in a row. Technology companies are closing in on all-time highs and continued to rise Monday, led by big names like Cisco Systems and Qualcomm.
Aerospace and defense companies rose after President Donald Trump presided over a huge sale of military equipment to Saudi Arabia. Amazon led consumer-focused companies higher. Energy companies lagged even though oil prices continued their recent climb.
Sameer Samana, a strategist for Wells Fargo Investment Institute, said people continue to spend more on personal electronics while businesses invest in automation and software to boost their productivity.
“In a low-growth environment, you’ve got to squeeze more out of every dollar of investment,” Samana said.
The technology component of the S&P 500 index has soared 18 percent this year, almost three times as much as the broader S&P 500.
Both the S&P 500 and tech-heavy Nasdaq composite set records early last week before worries about growing political uncertainty in Washington, which could hamper Trump’s agenda of tax cuts and deregulation, knocked those indexes back from their highs.
Samana said he thinks stocks will become more volatile in the coming months, but not because of politics.
Instead, he thinks stocks will break out of their unusual calm because the Federal Reserve and European Central Bank will pull back on the stabilizing measures they’ve used since the global financial crisis.