Stocks extend their gains, though tech companies lag
Retailers and airlines helped lift U.S. stocks broadly higher Monday, extending the market’s gains from last week.
Consumer-focused and industrial companies grabbed most of the gains. Banks and healthcare stocks also rose. Energy companies climbed along with the price of U.S. crude oil.
Technology companies lagged, weighing down the Nasdaq composite index for much of the day.
The market’s latest gains, though modest, added to a mostly solid summer for stocks. The benchmark Standard & Poor’s 500 index has posted a weekly gain in six of the last seven weeks.
On Monday, the S&P 500 rose 6.92 points, or 0.2%, to 2,857.05. The Dow Jones industrial average climbed 89.37 points, or 0.3%, to 25,758.69.
The Nasdaq composite recovered from a morning slide, ending with a gain of 4.68 points, or 0.1%, at 7,821.01. The Russell 2000 index of smaller-company stocks also rebounded, finishing up 5.75 points, or 0.3%, at 1,698.69.
Stocks got off to a mixed start as investors weighed corporate earnings and deal news.
Since last week, investors have been feeling cautiously optimistic about the prospects for an end to the trade dispute between the United States and China, which has led to costly, dueling tariffs between the two nations and caused uncertainty in the markets. Hopes rose late last week on news that China will send an envoy to Washington this month to discuss a way out of the standoff before President Trump and Chinese President Xi Jinping meet in November.
“Is there motivation to get it resolved before November? Sure, but it’s not going to be resolved any time soon,” said Tom Martin, senior portfolio manager with Globalt Investments. “It’s going to continue to be an overhang, and there’s going to be a lot of posturing before any real deals are reached.”
On Monday, investors bid up shares in consumer-focused companies, with several big department store chains leading the way. Macy’s was the biggest gainer in the S&P 500, jumping 6.1% to $38.21. Kohl’s advanced 3.2% to $78.85. Nordstrom climbed 4% to $61.56. Gap rose 2.8% to $32.17.
Airlines climbed as part of a broader rise in industrial stocks. American Airlines Group jumped 5.8% to $39.99. United Continental climbed 3.9% to $85.22. Southwest Airlines rose 3.3% to $61.63.
Estee Lauder climbed 3.4% to $140.56 after the cosmetics company reported quarterly results that topped Wall Street’s forecasts. The company benefited from better-than-expected global sales, particularly in Asia.
SodaStream jumped 9.4% to $142.11 after PepsiCo agreed to buy the Israeli maker of carbonated drink machines for $3.2 billion.
China Biologic Products Holdings surged 8.7% to $100 after the company received a takeover offer from an investor group for $118 a share in cash.
Technology stocks, which have outperformed other sectors this year, slumped Monday. Intel fell 1.3% to $46.50.
“The biggest thing you’re seeing is the continued divergence between growth and value [stocks],” said Martin, noting that investors have lately been rotating portfolios to favor value stocks more than growth stocks, such as technology.
“The valuation of technology stocks is high, relative to other areas,” Martin said.
U.S. benchmark crude rose 0.8% to settle at $66.43 a barrel in New York. Brent crude, the standard for international oil prices, rose 0.5% to $72.21 a barrel in London.
The rise in oil prices helped lift energy-sector stocks. Baker Hughes climbed 3.2% to $32.01.
Bond prices rose. The yield on the 10-year Treasury fell to 2.82% from 2.87%.
The dollar fell to 110.23 yen from 110.60 yen. The euro rose to $1.1467 from $1.1443.
Gold rose 0.9% to $1,194.60 an ounce. Silver rose 0.3% to $14.67 an ounce, and copper climbed 1.5% to $2.69 a pound.
Heating oil rose 0.7% to $2.11 a gallon, and wholesale gasoline rose 1.7% to $2.02 a gallon. Natural gas fell 0.2% to $2.94 per 1,000 cubic feet.
UPDATES:
2:30 p.m.: This article was updated with closing prices, context and analyst comment.
1:30 p.m.: This article was updated with the close of markets.
This article was originally published at 7:10 a.m.
