Tesla soars as stocks climb to another record
Technology companies led stocks to broad gains on Wall Street Monday, driving the S&P 500 and Nasdaq composite indexes to more record highs — with Palo Alto electric car maker Tesla jumping 9.8% to close above $500 for the first time.
Financial, communications services and industrial stocks also notched solid gains. Health care stocks were the only decliners. Bond prices fell, sending yields higher, and the price of gold fell, signs that investors were favoring higherrisk holdings.
The rally, which added to the market’s gains from last week, came as investors looked ahead to the signing of an initial trade deal with China and the potential for future talks.
The world’s largest economies are expected to sign the “Phase 1” trade agreement on Wednes
day. It is being viewed as an opening to future negotiations that will deal with more complicated trade issues.
Even a partial deal should remove much of the uncertainty that has weighed on companies and investors, at least until after the election, said Scott Ladner, chief investment officer for Horizon Investments in Charlotte.
“We don’t think the tariff overhang is going to be very relevant over the next nine months,” Ladner said. “Acting tough with China and imposing tariffs two years before an election is a very different story than doing it two months before an election.”
The Trump administration also said Monday that it is dropping its designation of China as a currency manipulator, but their preliminary pact includes a section that’s intended to prevent China from manipulating its currency to gain trade advantages.
The action comes five months after the Trump administration had branded China a currency manipulator — the first time that any country had been so named since 1994 during the Clinton administration.
The S&P 500 index rose 22.78 points, or 0.7%, to 3,288.13. The Nasdaq composite, which is heavily weighted with technology stocks, climbed 95.07 points, or 1%, to 9,273.93. The S&P and Nasdaq previously set new highs last Thursday.
The Dow Jones Industrial Average gained 83.28 points, or 0.3%, to 28,907.05.
The Russell 2000 index of smaller company stocks picked up 11.96 points, or 0.7%, to 1,669.61.
Across markets, worries about a recession have faded since last year as central banks cut interest rates and pumped stimulus into the global economy. In addition, the promise of a “Phase 1” trade deal between the
U.S. and China has helped lift markets in recent weeks, easing investors’ concerns of further escalation in the costly conflict.
Full details of the pact are due to be released after the agreement is signed at the White House on Wednesday.
Chipmakers were among the gainers in the technology sector Monday. Nvidia climbed 3.1% and Micron Technology rose 1.4%. The sector is particularly sensitive to developments in trade relations because many of the companies rely on China for sales and supply chains. Apple also rose, closing 2.1% higher.
Industrial and communication services companies also made solid gains. General Electric rose 3.9% and Facebook added 1.8%.
Health care stocks slumped, with insurance companies among the sector’s biggest decliners. Cigna fell 3.2%, UnitedHealth Group slid 3.1% and Anthem dropped 3.6%.
The yield on the 10year Treasury rose to 1.85% from 1.82% late Friday. The pickup in yields helped lift financial stocks, as it makes it possible for banks to charge higher interest rates on mortgages and other consumer loans. Goldman Sachs rose 1.3% and Citigroup gained 1.8%.
Netflix climbed 3% as the streaming video service earned two best picture nominations for the 92nd annual Academy Awards. Both Martin Scorsese’s “The Irishman” and Noah Baumbach’s “Marriage Story” are contenders.
Traders bid up shares in Hexcel 9.6% after the company said it is being bought by rival Woodward in a deal that will create one of the largest suppliers in the aerospace and defense industry. Woodward rose 4.8% and will own the majority of the combined company when the deal closes.
Tesla CEO Elon Musk speaks at a delivery ceremony last week for the Model 3 cars made in Shanghai. Tesla’s stock soared on Monday.