The News Herald (Willoughby, OH)
Technology, defense companies push stocks
Strong gains for technology companies like software and chip makers helped lead U.S. stocks higher Monday.
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 money 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. At the same time, he added, some overseas markets have been stronger than expected this year.
The Standard & Poor’s 500 index jumped 12.29 points, or 0.5 percent, to 2,394.02. The Dow Jones industrial average added 89.99 points, or 0.4 percent, to 20,894.83. The Nasdaq composite gained 49.91 points, or 0.8 percent, to 6,133.62. The Russell 2000 index of smaller-company stocks picked up 9.81 points, or 0.7 percent, to 1,377.14.
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. On Monday chipmaker Qualcomm gained $1.61, or 2.8 percent, to $59.28 and Cisco Systems, which sells equipment like routers, switches and software, rose 38 cents, or 1.2 percent, to $31.59. Adobe Systems picked up $2.42, or 1.8 percent, to $138.85 and design software maker Autodesk jumped $3.45, or 3.1 percent, to $113.36.
Both the S&P 500 and techheavy Nasdaq composite set records early last week before worries about growing political uncertainty in Washington, which could hamper President Trump’s agenda of tax cuts and deregulation, knocked those indexes back from their highs. The Russell 2000 of smaller companies, which would benefit more than large ones from Trump’s proposals, is down 3 percent from the record it set a month ago.
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.
“If they both start to lay the groundwork for pulling back on the extraordinary stimulus, that’s probably the catalyst for a little bit more volatility,” he said.
Aerospace and defense companies climbed after President Trump presided over a $110 billion sale of military equipment to Saudi Arabia. The agreement could expand to $350 billion over 10 years. Lockheed Martin climbed $4.24, or 1.6 percent, to $277.03 and Boeing gained $2.91, or 1.6 percent, to $183.67.
Amgen and its partner UCB said women who took their experimental osteoporosis drug Evenity were more likely to have serious cardiovascular problems than patients who took Fosamax, an older drug. The companies said that was a new safety concern and they no longer expect the Food and Drug Administration to approve Evenity this year. Amgen lost $3.49, or 2.2 percent, to $153.02.