Stocks end a volatile day with small gains
U.S. stock indexes finished a bit higher Monday as investors let go of some of their fears about a trade war between the United States and China. But far bigger gains slipped away as the market suffered a steep decline in the final hours of trading.
Stocks climbed higher and higher early in the day, bringing the Dow Jones industrial average up as much as 440 points. That put the market on track to make up almost all of the ground it lost during Friday’s big sell-off. But stocks have repeatedly changed course as investors tried to guess the outcome of the U.S.-China trade dispute, and they did it again Monday.
Healthcare companies finished with strong gains, and technology companies such as Microsoft and Apple regained some the ground they recently lost. Banks rose along with interest rates. But industrial and retail companies fell, and smaller companies fared worse than larger ones did.
“Every day the market wakes up and it struggles with whether it should pay attention to noise or pay attention to fundamentals,” said Marina Severinovsky, an investment strategist at Schroders. She said stocks have done well recently when investors can get their minds off the trade disputes because the global economy and the U.S. economy are still growing.
When companies start to report their first-quarter results this week, she added, the results are likely to be good.
The Standard & Poor’s 500 index rose 8.69 points, or 0.3%, to 2,613.16. The index fell 1.4% last week, with large losses on Monday and Friday and strong gains in between.
The Dow Jones industrial average rose 46.34 points, or 0.2%, to 23,979.10. The Nasdaq composite climbed 35.23 points, or 0.5%, to 6,950.34. The Russell 2000 index of smaller-company stocks edged up 1.17 points, or 0.1%, to 1,514.46. The Russell index is composed of more U.S.-focused companies that are somewhat less vulnerable to the effects of tariffs, so its moves in response to the recent trade tensions haven’t been as dramatic.
Investors don’t know how the trade dispute might evolve and what it might mean for the global economy. Although President Trump continued to bash America’s trade deals Monday on Twitter, he said the United States and China could settle their dispute. But things looked worse at the end of last week, when Trump threatened to impose tariffs on an additional $100 billion worth of Chinese goods. China has pledged to “counterattack with great strength” if Trump follows through on that threat. The two nations had already proposed $50 billion in tariffs on imports, but none of that has taken effect yet.
“We don’t have a trade war,” Severinovsky said. “We have potential suggestions of things that could happen.”
Swiss drugmaker Novartis agreed to buy AveXis for $8.7 billion, or $218 a share, as it aims to become a leader in the treatment of neurodegenerative diseases. AveXis is studying a treatment for a disorder called spinal muscular atrophy Type 1, which Novartis called the top genetic cause of death in infants. AveXis stock leaped 81.6% to $210.46. Novartis rose 1.1% to $81.07.
Agribusiness company Monsanto jumped 6.2% to $125.15 after the Wall Street Journal reported that the Department of Justice will approve its sale to German conglomerate Bayer.
Facebook ticked up 0.5% to $157.93. Its stock is down almost 15% since March 16.
This week will be a big one for Facebook as it tries to get its data privacy scandal under control. Chief Executive Mark Zuckerberg is meeting with legislators and will testify before Congress this week, and the company has embarked on a high-profile effort to convince users, advertisers and investors that it is serious about fixing problems that led to the Cambridge Analytica scandal and about user privacy as a whole.
Facebook’s woes have affected other social media companies and big technology companies, including Google’s parent company, Alphabet. Severinovsky said investors are considering the possibility that the companies will be regulated in ways they never have been, which would create new costs and affect their earnings. But she thinks they will continue to be very profitable anyway.
Overall, technology companies climbed Monday as investors took a more optimistic view of the U.S.-China trade dispute. Apple rose 1% to $170.05. Alphabet rose 1% to $1020.09.
Leucadia National leaped 11.6% to $24.29 after the investment bank said it will sell part of its investment in National Beef and change its name to Jefferies Financial.
Deutsche Bank rose 1% to $14.01 after the bank said John Cryan will step down as CEO and longtime executive Christian Sewing will succeed him.
U.S. aluminum companies rose after the government placed sanctions on Russian aluminum company Rusal. Century Aluminum jumped 12.1% to $18.82.
With most other stocks rising again, more defensive and high-dividend companies lagged behind the rest of the market. Campbell Soup slipped 1.1% to $43.26.
Bond prices fell. The yield on the 10-year Treasury note rose to 2.78% from Friday’s 2.77%.
Benchmark U.S. crude jumped $1.36, or 2.2%, to $63.42 a barrel in New York. Brent crude, used to price international oils, rose $1.54, or 2.3%, to $68.65 a barrel London.
Wholesale gasoline rose 3 cents to $1.98 a gallon. Heating oil rose 4 cents to $2 a gallon. Natural gas fell 1 cent to $2.69 per 1,000 cubic feet.
Gold rose $4 to $1,340.10 an ounce. Silver rose 17 cents to $16.53 an ounce. Copper ticked up 2 cents to $3.08 a pound.
The dollar fell to 106.78 yen from 106.85 yen. The euro rose to $1.2322 from $1.2285.
In overseas markets, Germany’s DAX and Britain’s FTSE 100 each rose 0.2%, and the CAC 40 in France edged up 0.1%. Asian stocks fared better. Tokyo’s Nikkei 225 advanced 0.5%, Hong Kong’s Hang Seng climbed 1.3%, and Seoul’s Kospi rose 0.6%.
UPDATES:
3:50 p.m.: This article was updated with closing prices, context and analyst comment.
1:15 p.m.: This article was updated with the close of markets.
10:50 a.m.: This article was updated with market prices and context.
This article was originally published at 6:55 a.m.
