Retail gains, trade talks lift stocks

MARLEY JAY

NEW YORK — Stocks rose again Monday, led by gains in retailers and smaller companies after a report showed strong orders last month for service-sector companies, where most Americans work. Investors were also encouraged by the resumption of trade talks between the U.S. and China.

That helped stocks build on the huge gains they made Friday. The U.S. economy has been a top concern for investors over the past three months, and the strong report on service companies showed that banks, health care and construction companies were holding up well.

The S&P 500 rose 17.75 points, or 0.7 percent, to 2,549.69. The index, a benchmark for many mutual funds, closed at its highest level in more than three weeks, and it has risen 8.4 percent since Dec. 24. It’s still 13 percent below the record high it reached late September. The Dow Jones industrial average rose 98.19 points, or 0.4 percent, to 23,531.35. The Nasdaq gained 84.61 points, or 1.3 percent, to 6,823.47.

Shares of dollar-store companies and other retailers, clothing companies and carmakers all climbed. Amazon surpassed Microsoft to become the most valuable publiclytraded company. The two-day gain followed a huge pullback Thursday, when a weak report on manufacturing helped send large multinational companies sharply lower.

“The portion of the economy that’s domestically focused is doing better than the portion that is exporting, and arguably that is coming from the trade winds and the tensions we see from that,” said Jason Pride, chief investment officer of private clients at Glenmede.

Smaller companies, which tend to be more closely linked to how well the domestic economy is doing, did far better than the rest of the market. The Russell 2000 jumped 24.62 points, or 1.8 percent, to 1,405.37.

While trading has been rough over the past two weeks, stocks have moved higher as investors hoped that the U.S. and China will finally make progress in trade talks. But Wall Street is fearful that the trade dispute is far from a resolution. The U.S. and China both placed tariffs on billions of dollars’ worth of each other’s exports in 2018, and those taxes are likely to rise in March if they don’t make progress in negotiations.

Reports of the latest round of trade discussions contributed to the market’s big rally Friday.

“This is the biggest wild card, because you don’t know exactly how these parties are going to reach an agreement,” said Pride. “Just keeping the tariffs that have been announced so far and not going ahead with new ones would be a positive surprise for the market.”

Amazon rose 3.4 percent to $1,629.51, raising its value to $796.8 billion, compared with $783.6 billion for Microsoft.

Dollar Tree rose after activist investment firm Starboard Value disclosed a stake in the discount retailer and pushed the company to consider selling the Family Dollar chain it bought in 2015. It nominated seven candidates for seats on Dollar Tree’s board of directors. The stock climbed 5.5 percent to $97.96. Elsewhere, Target gained 4.9 percent to $69.68.

Oil prices continued their recent rally. U.S. crude rose 1.2 percent to $48.52 per barrel in New York. After sinking to an 18-month low of $42.53 a barrel on Dec. 24, the price of U.S. crude has risen for seven of the past eight trading days. Brent crude, used to price international oils, rose 0.5 percent to $57.33 per barrel in London.

Bond prices fell. The yield on the 10-year Treasury note rose to 2.69 percent from 2.65 percent.