Industrials lead Wall St rally after NAFTA deal
Wall Street got off to a strong start of the fourth quarter on Monday, with industrials and automotive stocks leading a broad rally after a last-minute deal to salvage NAFTA as a trilateral pact.
Canada and Mexico accepted more restrictive commerce in the new United States-Mexico-Canada Agreement (USMCA), which will make it harder for global automakers to build cars cheaply in Mexico and aims to bring more jobs to the United States.
Shares of Ford jumped 1.6 percent, while General Motors gained 1.3 percent. Auto-part makers also climbed and the S&P 1500 auto parts & equipment index rose 0.38 percent, marking its first increase in seven sessions.
Railroad Kansas City Southern, which gets revenue from Mexico, gained 2.5 percent. Industrial stocks jumped 1.1 percent and were on track for their best day in five weeks.
Nine of the 11 major S&P sectors were higher, with gains of more than 1 percent also seen in the materials and energy indexes. The heavyweight technology and health sectors were up between 0.8 percent and 0.9 percent.
"It`s relatively broad-based rather than certain stocks... you`ve had this trade stuff hanging over the markets for a while, so any good news is positive," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
At 11:27 a.m. EDT the Dow Jones Industrial Average was up 259.68 points, or 0.98 percent, at 26,717.99, the S&P 500 was up 19.36 points, or 0.66 percent, at 2,933.34 and the Nasdaq Composite was up 39.80 points, or 0.49 percent, at 8,086.16.
Market reaction to these developments are relatively short-lived, but the economics in the market is very strong and only concerns about the trade issues have been holding it back from moving higher, said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin.
Among sectors, only the defensive real estate and utilities were in the negative territory.
General Electric soared 9.6 percent and was set for its best day in three-and-a-half years, after replacing Chief Executive John Flannery with board member Larry Culp, who, investors bet, could re-energize the brand and transform its portfolio more quickly.
Tesla shares soared 16.1 percent as signs it had met targets for quarterly production numbers added to relief at Chief Executive Elon Musk`s settling a lawsuit with regulators that could have forced him out.
Among decliners, Intel slipped 1.2 percent after Barclays downgraded the chipmaker`s stock, saying it would face a costly battle to keep market share amid a near-term slowing of its end markets.
Advancing issues outnumbered decliners by a 1.21-to-1 ratio on the NYSE and a 1.01-to-1 ratio on the Nasdaq.
The S&P index recorded 41 new 52-week highs and two new lows, while the Nasdaq recorded 80 new highs and 35 new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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