Progress in trade talks lifts stocks
Technology companies and banks helped power stocks on Wall Street broadly higher Monday, extending the market’s gains of the last two weeks.
The rally came as investors found fresh reason for optimism as the U.S. and China continue negotiations aimed at resolving their costly trade war. China’s top negotiator said over the weekend that “substantial progress” was being made.
The latest gains nudged the S&P 500 above 3,000 points for the first time in a month. The benchmark index is now within 0.7% of its all-time high set on July 26.
The S&P 500 index rose 20.52 points, or 0.7%, to 3,006.72. The Dow Jones Industrial Average gained 57.44 points, or 0.2%, to 26,827.64. The Nasdaq climbed 73.44 points, or 0.9%, to 8,162.99.
The Russell 2000 index of smaller stocks did much better than other indices in another sign of investors’ confidence. The index picked up 14.66 points, or 1%, to 1,550.14.
As they wait for trade talk developments, investors have been shifting their focus to corporate earnings reports. Monday was a relatively quiet start to a week full of results from major companies.
Analysts came into this latest earnings season expecting profits to decline overall for companies in the S&P 500. But with about 15% of companies in the index reporting so far, results have been surprisingly positive.
Earnings growth fell slightly in the first and second quarters, according to data from FactSet, which was better than Wall Street’s expectation at the start of those reporting seasons.
Chipmakers, many of which are highly reliant on China for business, made some of the strongest gains Monday. Nvidia rose 2.9% and Micron Technology added 4%. Apple rose 1.7%
Banks benefited from a solid rise in bond yields. Citigroup gained 3%.
The yield on the 10-year Treasury rose to 1.80% from 1.75% late Friday. Higher yields allow banks to charge more lucrative interest on mortgages and other loans.
Boeing shares fell 3.8% on top of a 6.8% slide Friday. Investors are concerned about the revelations surrounding its 737 Max airplanes. Congress is ramping up its scrutiny of Boeing as Chief Executive Dennis Muilenburg is scheduled to testify to the House’s transportation committee Oct. 30.
In messages released last week, former senior Boeing test pilot Mark Forkner told a co-worker in 2016 he unknowingly misled safety regulators about problems with a flight-control system that would later be implicated in two deadly crashes.
Energy futures closed lower Monday. Benchmark crude oil fell 47 cents to $53.31 a barrel. Brent crude oil dropped 46 cents to close at $58.96 a barrel.
Gold fell $6 to $1,488.10 per ounce and silver added 2 cents to $17.60 per ounce.