NAFTA replacement deal lifts Wall Street

Updated: Tue, Oct 02, 2018
12:45 am
Reuters
RELATED NEWS
Global growth worry hits stocks, but U.S. data lifts dollar Global growth worry hits stocks, but U.S. data lifts dollar
Oil drops 2 percent on Wall Street losses, weak China data Oil drops 2 percent on Wall Street losses, weak China data
Exclusive: T-Mobile, Sprint parents consider dropping Huawei, see U.S. security clearance for deal - sources Exclusive: T-Mobile, Sprint parents consider dropping Huawei, see U.S. security clearance for deal - sources
China wants to make 'big', 'very comprehensive' deal: Trump China wants to make 'big', 'very comprehensive' deal: Trump
Oil drops 2 percent on Wall St. losses, weak China data Oil drops 2 percent on Wall St. losses, weak China data

Wall Street kicked off the fourth quarter on a positive note on Monday, as a last-minute deal to salvage NAFTA as a trilateral pact helped ease trade concerns.

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.

Industrial stocks, and more specifically auto and rail-related shares rose. Ford gained 1.3 percent, while General Motors advanced 1.4 percent. Among railroads, Kansas City Southern rose 3.2 percent.

The industrial sector <.splrci>, sensitive to trade developments in recent months, was up 1.1 percent, on track for their best day in five weeks.

"It is not all good, but it is unquestionably good to have the uncertainty removed and unquestionably good to have updated what was an old agreement that didn’t address a lot of the ways the economy has changed over the years," said Christopher Smart, head of global macroeconomic and geopolitical research at Barings in Boston.

"The nearer term issue is will it get through Congress because trade is always so painful to get through the United States political system."

The biggest boost to the industrials, however, was General Electric , which rose 8.0 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 hope can transform the company`s portfolio more quickly.

The Dow Jones Industrial Average <.dji> rose 213.44 points, or 0.81 percent, to 26,671.75, the S&P 500 <.spx> gained 13.06 points, or 0.45 percent, to 2,927.04 and the Nasdaq Composite <.ixic> dropped 0.51 points, or 0.01 percent, to 8,045.84.

Aside from industrials, the materials <.splrcm> and energy <.spny> sectors also rose more than 1 percent. Energy stocks got a boost as crude oil prices hit their highest level since 2014 on a combination of the new trade agreement and U.S. sanctions on Iran.

Smallcap stocks were under pressure, with the Russell 2000 <.rut> off 0.97. Smaller names had been seen as more immune to trade pressures and the index is now off more than 3 percent from its Aug. 31 high.

The defensive real estate <.splrcr> and utilities <.splrcu> sectors led the decliners. The communications services index <.splrcl> also fell 0.32 percent as media stocks lagged.

Tesla shares soared 16.8 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.

Declining issues outnumbered advancing ones on the NYSE by a 1.13-to-1 ratio; on Nasdaq, a 1.61-to-1 ratio favoured decliners.

The S&P 500 posted 46 new 52-week highs and 6 new lows; the Nasdaq Composite recorded 95 new highs and 68 new lows.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)

By continuing to use the site, you agree to the use of cookies. You can find out more by clicking this link

Close