Dow up by triple digits as financials rally
The Dow rose by triple digits for a third session Monday as U.S. stocks posted a broad rally, with strong economic data appearing to overshadow worries about rising trade tensions.
Among notable leaders were bank stocks, putting the financial sector in position for its biggest one-day advance in a month.
The Dow Jones Industrial Average DJIA, +1.23% gained 309 points, or 1.3%, to 24,765. The S&P 500 SPX, +0.72% added 21 points, or 0.8%, to 2,781 while the Nasdaq Composite Index COMP, +0.56% climbed 37 points, or 0.5%, to 7,725. All three are on track for their third straight gain.
With the move, the Dow turned positive for 2018, and is now up roughly 0.2% for the year. The blue-chip average is also set to end above its 50-day moving average for the first time in nearly three weeks, a positive sign for its short-term momentum trend.
On Friday, June data on nonfarm payrolls came in stronger than expected, and May and April jobs figures were revised higher.
The report was seen as underlining the strength in the U.S. economy at a time when many investors are concerned about worsening relations between the U.S. and its major trading partners. The Trump administration last week officially imposed tariffs on $34 billion of Chinese imports; Beijing implemented tariffs on the same value in U.S. goods.
European stocks SXXP, +0.58% advanced, while the ICE U.S. Dollar Index DXY, +0.11% was largely flat, rebounding as the pound reversed an earlier rise GBPUSD, -0.1580% that followed the resignation of U.K. Brexit Secretary David Davis. The subsequent resignation of Foreign Secretary Boris Johnson was seen raising the possibility Prime Minister Theresa May could face a leadership challenge from within her party.
Stocks in Asia rallied, where China’s Shanghai Composite SHCOMP, +2.47% rose 2.5%, cutting its July loss to 1.1% and reducing its 2018 drop to 15%.
Gold futures GCQ8, +0.32% rose while U.S. oil futures CLQ8, -0.41% retreated.
“Given the rhetoric over the past few weeks, it seems like the probability of a trade war has increased. However, in the short term I still think there’s a relatively low probability that one will actually occur. And in the meantime, U.S. economic data has been good, and the Street knows this will be a good year for earnings,” said Scott Wren, senior global equity strategist for Wells Fargo Investment Institute.
“The shift in focus away from trade woes can be seen in that the two sectors of the market that had been most depressed of late, industrials and financials, are leading the charge today,” Colin Cieszynski, chief market strategist at SIA Wealth Management, said in a note.
At 3 p.m. Eastern Time, investors are due to get a consumer credit data for May.
Check out: MarketWatch’s Economic Calendar
The day’s gains were broad based, with seven of the 11 primary S&P 500 sectors higher in early trading. Leading the advance were financial stocks, which jumped 2%.
Among notable movers, JPMorgan Chase & Co. JPM, +2.78% rose 2.6% while Bank of America BAC, +3.25% was up 3%. Citigroup Inc. C, +2.22% jumped 2.2% and Goldman Sachs Group Inc. GS, +2.44% was up 2.3%.
While the sector was supported by signs of broader economic growth, it also benefited from a rise in bond yields, which is a positive for banks that borrow on a short-term basis and lend on a longer-term basis. The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, +1.36% rose 3.4 basis points on Monday.
Groupon Inc. GRPN, +7.68% shares rose 4.2% following a media report that it may be looking for a buyer, with China’s Alibaba Group Holding Ltd. BABA, -0.01% a potential suitor.
Twitter Inc. TWTR, -5.89% shares slumped 8.9% in the wake of a Washington Post report that the social media company is suspending more than 1 million fake accounts every day, which could hurt its user growth rate.
JPMorgan upgraded Archer Daniels Midland ADM, +1.17% to neutral from underweight; the stock rose 0.9%.
Anadarko Petroleum Corp. APC, +1.59% said it was increasing its share buyback authorization by $1 billion, bringing the total to $4 billion. Shares rose 1.2%.
CTI BioPharma Corp. CTIC, -13.08% tumbled 14% after it said a late-stage trial of a treatment for the blood cancer non-Hodgkin lymphoma failed to meet its main goals.
Vista Outdoor Inc. VSTO, +0.24% announced a deal to sell its Bolle, Cebe and Serengeti eyewear brands for about $158 million to a European private-equity fund, as part of its plan to focus on its shooting, ammunition and hunting categories. The stock gained 0.1%.
–Barbara Kollmeyer and Victor Reklaitis contributed to this report
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