Stock indexes end the day with small gains
The major U.S. stock indexes ended with small gains Monday after an afternoon pullback weighed on small-company shares.
The market had been broadly higher earlier in the day on hopes that trade tensions between the United States and China were easing. But much of that rally faded, leaving decliners on the New York Stock Exchange outnumbering risers.
Gains by healthcare and energy stocks outweighed losses by real estate companies and others. Casino operators and equipment companies got a boost from a Supreme Court decision that cleared the way for states to legalize sports betting.
The Standard & Poor’s 500 index edged up 2.41 points, or 0.1%, to 2,730.13. The Dow Jones industrial average climbed 68.24 points, or 0.3%, to 24,899.41. The Nasdaq composite rose 8.43 points, or 0.1%, to 7,411.32.
Small-company stocks fell. The Russell 2000 index lost its early gains, sliding 6.45 points, or 0.4%, to 1,600.34.
The major stock indexes’ latest gains add to the market’s solid run this month. Last week the S&P 500, the benchmark for the broader stock market, had its best weekly gain since early March.
The indexes got off to a strong start Monday as investors hoped for reduced trade tensions between the U.S. and China after President Trump tweeted over the weekend that he would help Chinese telecommunications company ZTE get “back into business.”
ZTE’s Hong Kong-traded shares have been suspended since U.S. authorities banned it last month for seven years from importing U.S. components in a case involving illegal exports to North Korea and Iran. But Trump said too many jobs in China are at stake after the U.S. government sanctions cut off access to ZTE’s American suppliers.
China’s foreign ministry responded by saying it “highly commended” the move, ahead of trade talks in Washington this week.
Fears of retaliatory tariffs and other trade disruptions roiled the market this spring before the latest raft of company earnings captured investors’ focus. Trump’s tweet about ZTE may be a sign that U.S.-China trade negotiations are relatively constructive, if not friendly, said Brian Nick, chief investment strategist at Nuveen Asset Management.
“If you have concessions being made like that on one or both sides, it probably means that the worst-case outcome is less likely, which would be a good thing for stocks,” Nick said. “In general the market probably overreacted to the trade-related noise that started popping up around March 1. There was this sense that we might get this worst-case-scenario trade war, and that seemed to be priced in relatively quickly, and we’re starting to see it priced out of equity valuations now.”
U.S. companies that would stand to benefit from an effort to rescue ZTE moved higher Monday. Optical components maker Acacia Communications jumped 8.7% to $34.25. Oclaro, which also makes optical components, advanced 2.9% to $8.82.
Qualcomm and NXP Semiconductors got a boost as investors banked that Chinese regulators will reverse their stance and approve Qualcomm’s proposed $44-billion acquisition of NXP. China is the final major government withholding approval of the deal, but Bloomberg News reported that Chinese regulators are reviewing the deal again. Qualcomm rose 2.7% to $56.74. NXP surged 11.8% to $110.74.
Investors continued to bid up shares in healthcare companies. CVS Health climbed 3.7% to $66.82.
Casino operators and equipment makers surged after the Supreme Court struck down a federal law that barred gambling on football, basketball and other sporting events in most states. The 6-3 decision gives states the go-ahead to legalize sports betting. MGM Resorts rose 1.6% to $32.32. Penn National Gaming climbed 4.7% to $33.75. Empire Resorts jumped 15.7% to $22.50. Scientific Gaming, which makes casino and interactive games as well as lottery games, vaulted 11.2% to $59.30.
Viacom tumbled 4.9% to $28.74 after CBS sued its controlling shareholder, seeking to block efforts to make the company combine with Viacom. CBS climbed 2.2% to $53.65.
Xerox slid 4.3% to $28.87 after the copier maker ended merger talks with Fujifilm and resolved a dispute with investors Carl Icahn and Darwin Deason.
Benchmark U.S. crude oil rose 26 cents to settle at $70.96 a barrel in New York. Brent crude, used to price international oils, climbed $1.11, or 1.4%, to $78.23 a barrel in London.
Rising oil prices helped lift energy stocks. Range Resources shares rose 3.3% to $14.76.
In other energy futures trading, heating oil rose 3 cents to $2.25 a gallon. Wholesale gasoline rose a penny to $2.20 a gallon. Natural gas rose 4 cents to $2.84 per 1,000 cubic feet.
Bond prices fell. The yield on the 10-year Treasury rose to 2.99% from 2.97%.
The dollar rose to 109.66 yen from 109.30 yen. The euro edged down to $1.1944 from $1.1945.
Gold fell $2.50 to $1,318.20 an ounce. Silver fell 11 cents to $16.65 an ounce. Copper fell 2 cents to $3.09 a pound.
Major stock indexes in Europe finished down. Germany’s DAX and Britain’s FTSE 100 each fell 0.2%, while France’s CAC 40 was nearly flat. In Asia, Japan’s benchmark Nikkei 225 rose 0.5%. South Korea’s Kospi slipped 0.1%. Hong Kong’s Hang Seng jumped 1.4%.
