The U.S. stock market rose broadly Monday, with the S&P 500 flirting with 2,800, after President Donald Trump tweeted that he would delay China tariffs, and that there had been “substantial progress” in trade talks over the weekend.
How are stock indexes faring?
The Dow Jones Industrial Average DJIA, +0.38% rose 100 points, or 0.4%, to 26,131, while the S&P 500 index SPX, +0.26% gained 8 points, or 0.3%, to 2,800, the first time it traded above 2,800 since Nov. 8 on an intraday basis. The Nasdaq Composite Index COMP, +0.53% added 44 points, or 0.6%, to 7,571.
What’s driving the market?
Trade headlines dominated the action to start the week, with global equities climbing after Trump tweeted late Sunday that he would extend a deadline for increasing tariffs on Chinese imports, scheduled for March 1. He cited “substantial progress” across key topics such as intellectual property, technology transfers, agriculture and currency, and said if that continues, he will meet with President Xi Jinping at Mar-a-Lago to wrap up a deal.
Opinion: History suggests you should buy the dip if stocks falter at this level
The comments came after U.S. and Chinese negotiators held talks through the weekend in a bid to resolve a long-running trade war. Still, state-owned Xinhua News Agency said in an opinion commentary that the latest round of talks show “there are still some differences that need more time to be ironed out.”
I am pleased to report that the U.S. has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues. As a result of these very......
— Donald J. Trump (@realDonaldTrump) February 24, 2019
Optimism was further boosted by reports that President Trump told a gathering of state governors Monday morning that there would be soon be a “signing ceremony” for the trade deal, supporting widespread perception that the president is eager to reach a deal in the coming weeks.
A busy week for data will include a number of reports delayed by the partial government shutdown, but investors will zero in on fourth-quarter gross domestic product data, expected to confirm signs that the economy slowed late in 2018.
The Chicago Fed national activity index declined in January to a negative 0.4, falling from a downward-revised, positive reading of 0.5 in December. A negative reading indicates the economy is growing at a below-trend rate.
Wholesale inventories in the U.S. rose 1.1% in December, according to a Census Bureau estimate that was delayed due to the government shutdown.
Read: Experts fear a 1960s-style rerun of the Fed letting inflation build up
What are analysts saying?
“We’re seeing progress on geopolitical issues,” Stephen Lee, founding principal of Logan Capital Management, told MarketWatch, pointing to reports that suggest the U.S. and China are close to reaching a deal, or at least a truce, on trade issues.
The removal of the threat of higher tariffs, Lee argued, should be a boon for stock pickers, as market performance would now hinge more on how individual companies are managing the changing global economic landscape and entrenching themselves in fast-growing economies like that of China and India.
Frank Cappelleri, a technical strategist at Instinet LLC, blamed short-term profit-taking as the S&P 500 tests 2,800-level for the index coming off earlier highs.
“The biggest drawdown since early January for the S&P 500 has been only 2.2%, thus, the market is due for a breather,” he said.
What stocks are in focus?
Shares of General Electric Co. GE, +6.49% rallied 7.3% after the industrial conglomerate announced the sale of its biopharama business to Danaher Corp. DHR, +8.50% for $21 billion in cash. Danaher also soared 8.2%.
Spark Therapeutics Inc. ONCE, +120.12% skyrocketed 120% after Roche Holding AG ROG, -0.29% said it would buy the biotechnology company in an all-cash deal worth $5.8 billion. Roche will pay $114.50 a Spark share, a premium of 122% to its closing price on Feb. 22.
Shares of Clementia Pharmaceuticals CMTA, +74.36% are up 75% after France’s Ipsen IPN, -6.54% said it would buy the Canada-based drug group in a deal valued at up to $1.31 billion.
Berkshire Hathaway Inc. BRK.A, +0.66% BRK.B, +0.34% class A shares are up 0.7% after Chairman and Chief Executive Officer Warren Buffett released his investment letter over the weekend. The conglomerate swung to a $25.4 billion loss in the fourth quarter, partly due to an unexpected write-down for Kraft Heinz Co. KHC, -2.02%
Shares of Kraft fell 2.1% after plunging 27% on Friday, the worst session ever after disappointing earnings and news of a probe by the Securities and Exchange Commission.
Shares of Newmont Mining Corp. NEM, -1.22% slipped 0.3% after Barrick Gold Corp. ABX, -2.98% said it has made an unsolicited proposal to buy the rival gold miner in a stock deal that would value Newmont at nearly $18 billion.
Shake Shack Inc. SHAK, -0.45% Etsy Inc. ETSY, +3.28% and Tenet Healthcare Corp. THC, +0.66% will all report after the close of trading on Monday.
How were other markets trading?
The Shanghai Composite Index SHCOMP, +5.60% closed up 5.6%, its best gain since mid-2015, according to Fact Set Research. Japan’s Nikkei 225 NIK, +0.48% however, shed 0.2%. European stocks were moderately higher, with the Stoxx Europe 600 SXXP, +0.26% up 0.2%
In commodity markets, crude oil CLJ9, -3.27% fell sharply, while gold prices GCJ9, -0.19% settled lower and the U.S. dollar DXY, -0.09% slipped less than 0.1%.
—Barbara Kollmeyer contributed to this article
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