U.S. stocks rallied on Monday after the United States and China put
their trade differences “on hold” to work on a wider agreement, while sentiment
was also boosted by the nearly $28 billion worth of merger deals.
The truce sparked a broad rally, with the Dow Jones Industrial
a session high of more than two months and the small-cap Russell 2000 hitting a
record high for the fourth straight session.
U.S. Treasury Secretary Steven Mnuchin said on Sunday the United States
and China had agreed to drop their tariff threats, while China on Monday
praised a significant dialing back of tensions.
“I suspect that we’ll continue to trend higher sans some major
disappointing news,” said Gordon Charlop, managing director at Rosenblatt
Securities in New York.
“This is an indication of what we’ll see near term, because we are
through earnings, relatively light on macro data, and with geopolitics, it
seems like some of the emotion has been reduced between now and the Korean
The S&P industrial sector .SPLRCI advanced 0.8 percent. Boeing (BA.N),
which sells about a fourth of its commercial aircraft to Chinese customers,
jumped 3.4 percent, the biggest percentage gainer on the Dow and lifting the
blue-chip index higher.
At 12:41 a.m. EDT the Dow Jones Industrial Average .DJI was
up 301.93 points, or 1.22 percent, at 25,017.02, the S&P 500 .SPX was
up 20.44 points, or 0.75 percent, at 2,733.41 and the Nasdaq Composite .IXIC was
up 41.91 points, or 0.57 percent, at 7,396.25.
General Electric (GE.N)
advanced 2.6 percent on an $11.1 billion deal to merge its transportation
business with rail equipment maker Wabtec (WAB.N),
which jumped about 4.2 percent.
Still, not all U.S. business leaders were happy with the trade war
truce, with some cautioning that Washington would find it tough to rebuild
momentum to address what they see as troubling Chinese policies.
AK Steel (AKS.N)
and U.S. Steel (X.N) both
fell more than 4 percent following a delay in implementing tariffs on Chinese
rose 3.9 percent, the most on the S&P, after the chipmaker lifted its
The easing of the trade dispute also boosted the chipmakers, whose major
clients include Chinese firms, with the Philadelphia chip index .SOX gaining
0.9 percent. The technology sector .SPLRCT rose 0.8 percent.
jumped 2.9 percent on pricing of Model 3’s fully-loaded version and after
brokerage Berenberg raised its already bullish price target.
Regional lender MB Financial (MBFI.O)
jumped 13.3 percent after agreeing to be bought for $4.87 billion by Fifth
Third Bancorp (FITB.O),
which fell 7.8 percent, the biggest percentage decliner on the S&P.
On the downside, Celgene fell 3.6 percent and hit a four-year low,
dragging on the Nasdaq Biotech index .NBI 0.8 percent lower.
Advancing issues outnumbered decliners by a 2.67-to-1 ratio on the NYSE.
Advancing issues outnumbered decliners by a 1.64-to-1 ratio on the Nasdaq.
The S&P index recorded 32 new 52-week highs and 3 new lows, while
the Nasdaq recorded 149 new highs and 26 new lows.