Stocks rally as U.S.-North Korea tensions appear to ease
U.S. stocks rallied Monday as technology companies and banks helped the market regain a lot of the ground it lost last week, although the calm that has defined the market this year wasn’t quite restored.
Almost 90% of the stocks in the Standard & Poor’s 500 index finished higher. Technology stocks outpaced the rest of the market following a strong report on the state of Japan’s economy. Last week, rising tensions between the U.S. and North Korea sent stocks to some of their biggest losses in 2017. That eased Monday after U.S. officials said fighting is not imminent.
“What the market really reacted negatively to on Thursday was Trump’s somewhat incendiary comments about ‘fire and fury,’” said Dave Lafferty, chief market strategist of Natixis Global Asset Management. “The administration sort of walked back Trump’s comments over the weekend.”
Although stocks climbed, investors weren’t ready to significantly loosen their grip on some traditionally safe investments. Bond prices slipped only a small amount, gold finished down a little, and silver prices rose.
The S&P 500 jumped 24.52 points, or 1%, to 2,465.84. The Dow Jones industrial average rose 135.39 points, or 0.6%, to 21,993.71. The Nasdaq composite climbed 83.68 points, or 1.3%, to 6,340.23. The Russell 2000 index of smaller companies went up 20.08 points, or 1.5%, to 1,394.31.
Among technology companies, Apple advanced 1.5% to $159.85 and Microsoft climbed 1.5% to $73.59. After two days of losses, Nvidia jumped 8% to $168.40 as chipmakers made outsize gains.
Bond prices turned lower. The yield on the 10-year Treasury note rose to 2.22% from 2.19%.
That helped bank stocks, as higher bond yields mean higher interest rates and greater profits on mortgages and other loans. Bank of America climbed 2.3% to $24.42. JPMorgan Chase rose 1.2% to $92.49.
U.S. crude oil sank $1.23, or 2.5%, to $47.59 a barrel in New York. Brent crude, the international standard, slid $1.37, or 2.6%, to $50.73 a barrel in London. Energy companies finished with modest losses.
Numerous companies used the weekend to complete deals.
Target is buying a delivery logistics company to help it offer same-day delivery service to in-store shoppers. The retailer did not say how much it will pay for Grand Junction, a firm that connects retailers with about 700 delivery companies around the country that pick up items from distribution centers and take them to customers. It is already testing same-day delivery at a New York store.
Target stock climbed 1.4% to $55.79. Amazon.com did even better, rising 1.6% to $983.30.
VF Corp., which owns North Face, Vans and other brands, said it will buy work clothes maker Williamson-Dickie for $820 million. VF stock climbed 3.1% to $63.50.
Equipment rental company Neff said it received a buyout offer worth $25 a share, or $596 million. It did not say who made the offer, but it said its board has decided the new offer is superior to a bid from H&E Equipment Services that it accepted last month. H&E, whose offer valued Neff at $21.07 a share, has the right to match the new offer.
Neff shares leaped 19% to $26. H&E fell 3.1%, to $20.93.
Drilling technology developer Tesco said it will be acquired by drilling contractor Nabors Industries in an all-stock deal. The companies said Tesco is being valued at $4.62 a share. Tesco shares jumped 12.8% to $4.40. Nabors fell 2.4% to $6.64.
Shonda Rhimes, the creator of popular television series such as “Scandal” and “Grey’s Anatomy,” will leave ABC and make shows for Netflix under a new contract. Financial terms were not disclosed. Netflix, which already spends billions of dollars a year on programming, has recently started shelling out more money for new shows. Last week it bought comic book publisher Millarworld, its first-ever acquisition. Netflix shares slipped 40 cents to $171.
Fiat Chrysler climbed 8.5% to $12.60 after Automotive News reported that a Chinese car maker offered to buy the company. It did not identify that company and said Fiat Chrysler rejected the offer because it wasn’t high enough, but investors hope another bid would come.
Snap, the maker of the Snapchat app, climbed 6.5% to $12.60, bouncing back somewhat from its Friday dive.
Gold fell $3.60 to $1,290.40 an ounce. Silver rose 5 cents to $17.12 an ounce. Copper fell 1 cent to $2.90 a pound.
The dollar rose to 109.63 yen from 109.04 yen. The euro fell to $1.1782 from $1.1824.
Wholesale gasoline fell 4 cents to $1.58 a gallon. Heating oil fell 3 cents to $1.61 a gallon. Natural gas fell 2 cents to $2.96 per 1,000 cubic feet.
In overseas markets, Germany’s DAX jumped 1.3% and the CAC 40 in France gained 1.2%. Britain’s FTSE 100 index added 0.6%. Hong Kong’s Hang Seng index jumped 1.4%. The South Korean Kospi rose 0.6%. Japanese stocks fell sharply as investors played catch-up after an extended holiday weekend; the Nikkei slid 1%.
UPDATES:
2:25 p.m.: This article was updated with closing prices, context and analyst comment.
This article was originally published at 7 a.m.
