Strong gains for technology companies helped lead U.S. stocks higher Monday. Defense contractors also climbed as the market continued to bounce back from a bout of turbulence last week.
Stocks rose for the third day in a row. Technology companies are closing in on all-time highs and continued to rise Monday, led by big names such as Cisco Systems and Qualcomm.
Aerospace and defense companies rose after President Trump presided over a huge sale of military equipment to Saudi Arabia. Amazon led consumer-focused companies higher. Energy companies lagged even though oil prices continued their climb.
Sameer Samana, a strategist for Wells Fargo Investment Institute, said people continue to spend more money on personal electronics while businesses invest in automation and software to boost their productivity.
“In a low-growth environment, you’ve got to squeeze more out of every dollar of investment,” Samana said. At the same time, he added, some overseas markets have been stronger than expected this year.
The Standard & Poor’s 500 index rose 12.29 points, or 0.5%, to 2,394.02. The Dow Jones industrial average advanced 89.99 points, or 0.4%, to 20,894.83. The Nasdaq composite jumped 49.91 points, or 0.8%, to 6,133.62. The Russell 2000 index of smaller-company stocks climbed 9.81 points, or 0.7%, to 1,377.14.
The technology component of the S&P 500 index has soared 18% this year, almost three times as much as the overall S&P 500. On Monday, chipmaker Qualcomm rose 2.8% to $59.28. Cisco Systems, which sells equipment such as routers, switches and software, rose 1.2% to $31.59. Adobe Systems ticked up 1.8% to $138.85. Design software maker Autodesk jumped 3.1% to $113.36.
Both the S&P 500 and tech-heavy Nasdaq composite set records early last week before worries about growing political uncertainty in Washington, which could hamper Trump’s agenda of tax cuts and deregulation, knocked those indexes back from their highs. The Russell 2000 index of smaller companies, which would benefit more than large ones from Trump’s proposals, is down 3% from the record it set a month ago.
Samana said he thinks stocks will become more volatile in the coming months, but not because of politics. Instead, he thinks stocks will break out of their unusual calm because the Federal Reserve and European Central Bank will pull back on the stabilizing measures they have used since the global financial crisis.
“If they both start to lay the groundwork for pulling back on the extraordinary stimulus, that’s probably the catalyst for a little bit more volatility,” he said.
Aerospace and defense companies climbed after Trump presided over a $110-billion sale of military equipment to Saudi Arabia. The agreement could expand to $350 billion over 10 years. Lockheed Martin climbed 1.6% to $277.03 and Boeing went up 1.6% to $183.67.
Amgen and its partner UCB said women who took their experimental osteoporosis drug Evenity were more likely to have serious cardiovascular problems than patients who took Fosamax, an older drug. The companies said that was a new safety concern and they no longer expect the Food and Drug Administration to approve Evenity this year. Amgen fell 2.2% to $153.02.
Ford replaced Chief Executive Mark Fields as it struggles to keep the traditional parts of its business running smoothly while it tries to remake itself as a nimble, high-tech automaker. In Fields’ three years as CEO, popular cars like the Fusion sedan became dated and Ford lagged behind competitors in bringing long-range electric cars to market. Ford’s new CEO is Jim Hackett, who has led Ford’s mobility unit for more than a year.
Ford shares rose 2.1% to $11.10. The stock is down 8.5% this year.
U.S-based Huntsman and Swiss specialty chemicals maker Clariant are merging to create a company with a market value of $13.8 billion. The combined company will call itself HuntsmanClariant, and Clariant shareholders will own 52% of it. Huntsman stock slid 2.1% to $26.15. Clariant stock rose 3.4% in Switzerland.
Nutraceutical International leaped 50.5% to $42.15 after the supplements company agreed to be bought by private equity firm HGGC for $41.80 a share in cash.
Oil prices continued to rally. Benchmark U.S. crude oil rose 40 cents to $50.73 a barrel. Brent crude, used to price international oils, rose 26 cents to $53.87 a barrel.
Wholesale gasoline rose 1 cent to $1.66 a gallon. Heating oil rose 2 cents to $1.60 a gallon. Natural gas climbed 7 cents, or 2.3%, to $3.33 per 1,000 cubic feet.
Gold rose $7.80 to $1,261.40 an ounce. Silver jumped 40 cents, or 2.4%, to $17.19 an ounce. Copper rose 1 cent to $2.60 a pound.
Bond prices moved a bit lower. The yield on the 10-year Treasury note inched up to 2.25% from 2.24%.
The dollar declined to 111.20 yen from 111.38 yen. The euro rose to $1.1234 from $1.1207.
In Britain, the FTSE 100 gained 0.3%. The German DAX slipped 0.2%, and France’s CAC lost a fraction of a percentage point. Japan’s market rose following strong trade data: The benchmark Nikkei 225 gained 0.5%. The South Korean Kospi jumped 0.7%. Hong Kong’s Hang Seng surged 0.9%.
3:15 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 7:45 a.m.