Stocks closed higher, led by gains in technology companies, banks and more in Monday’s Stock Market Update.
The technology sector of the S&P 500 rose 1.1%, snapping a three-day losing streak. Apple rose 1.7%. Intel gained 1.5%.
Financial services companies posted gains as bond yields rose. JPMorgan gained 2.4%.
Boeing shares dropped 3.7%. The company is facing increased scrutiny over its handling of a flight-control system that is implicated in two deadly crashes of its 737 Max airplanes. The decline in Boeing limited the gain for the Dow Jones Industrial Average.
The broader market has mostly cheered financial results, with earnings season still in the early stages. About 15% of companies in the S&P 500 have reported third-quarter results so far, according to FactSet.
Chipmakers, many of which are highly reliant on China for business, made some of the strongest gains Monday. Nvidia rose 2.9% and Micron added 3.9%.
Banks benefited from a solid rise in bond yields. Citigroup rose 2.9%.
The yield on the 10-year Treasury rose to 1.80% from 1.75% late Friday. Higher yields allow banks to charge more lucrative interest on mortgages and other loans. Higher yields are also a sign that investors are more confident.
The materials sector was the only laggard, as traders shifted their money from safe-play sectors toward holdings with more growth potential.
STOCK MARKET UPDATE
KEEPING SCORE: The S&P 500 gained 20 points, or 0.7%, to 3,006. The Dow rose 57 points, or 0.2%, to 26,827. The Nasdaq gained 73 points, or 0.9%, to 8,162.
The Russell 2000 index of smaller stocks did much better than other indices in yet another sign of investors’ confidence. The index rose 0.9%.
ANALYST’S TAKE: Analysts came into earnings season expecting another weak quarter for profit growth. So far, companies have reported surprisingly positive results.
“We remain cautious for the quarter but believe that companies will continue to chin the low bar they have set and ultimately, we will end the quarter flat or up low single digits,” said Katie Nixon, chief investment officer for Northern Trust Wealth Management, in a note to investors.
Earnings growth fell slightly in the first and second quarters, according to data from FactSet, which was better than Wall Street’s expectation at the start of those reporting seasons.
EARNINGS AHEAD: Monday marks a relatively quiet start to a week full of key corporate earnings. McDonald’s, the world’s biggest burger chain, will report its latest results on Tuesday along with shipping bellwether United Parcel Service.
Investors will be closely watching Boeing’s quarterly report on Wednesday for a better picture of the financial impact from its 737 Max jet groundings. Caterpillar, a key industrial company, will also report its results on Wednesday. Southwest Airlines and American Airlines, along with retail powerhouse Amazon, will report results on Thursday.
TURBULENT STOCK: Boeing tumbled 3.7%. Congress is ramping up its scrutiny of Boeing as its CEO, Dennis Muilenburg, is scheduled to testify to the House’s transportation committee on Oct. 30.
Investors are concerned about the latest revelations surrounding its 737 Max airplanes.
In messages released last week, former senior Boeing test pilot Mark Forkner told a co-worker in 2016 he unknowingly misled safety regulators about problems with a flight-control system that would later be implicated in two deadly crashes. On Sunday, the company said that it’s unfortunate that messages between co-workers weren’t released in a manner allowing for “meaningful explanation.”
OPIOID SETTLEMENT: The nation’s three largest drug distributors and a drugmaker have reached a tentative deal to settle a lawsuit related to the nation’s opioid crisis. The agreement comes within hours of the first federal trial over the crisis, with opening statements scheduled for Monday in Cleveland.
However, the settlement does not resolve more than 2,600 other lawsuits across the country seeking to hold the drug industry accountable for the opioid crisis.
AmerisourceBergen slid 3.3%, Cardinal Health shed 2.2% and McKesson fell 3.2%. Drug manufacturer Teva jumped 8.6%.
PUMPED: Halliburton climbed 6.4% after the oilfield services company said it will cut costs in its North American operations amid a decline in customer spending.
OVERSEAS: European markets closed broadly higher. The European Union is considering Britain’s request for an extension on its pending Oct. 31 exit from the trading bloc. Lawmakers in Britain voted for the delay.
Prime Minister Boris Johnson again pushed for lawmakers to accept the latest proposal over trade and other issues, but was rejected.
Stocks in Asia also finished higher.
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