S&P 500 Logs Third Straight Session of Gains as Tech, Industrial Sectors Rally
22 May 2017 - 9:37PM
Dow Jones News
By Alexander Osipovich and Riva Gold
A rally in technology and industrial shares lifted U.S. stocks
Monday, with the S&P 500 notching a third consecutive session
of gains.
Growth in corporate earnings and signs of economic strength have
helped mitigate investors' recent concerns about the Trump
administration's woes in recent sessions, some analysts said. That
helped many view last week's drop as a buying opportunity.
Of the 95% of S&P 500 companies that have reported results
so far for the first quarter, 75% have beat earnings per share
estimates, according to FactSet.
"It's quite encouraging how we bounced back from that wobble
last week," said Ian Williams, strategist at brokerage Peel Hunt.
"It underlines very strong bottom-up corporate earnings performance
across all major developed markets...that's been a big factor
offsetting geopolitical concerns," he said.
The Dow rose 90 points, or 0.4%, to 20895. The S&P 500 added
0.5% and the Nasdaq Composite gained 0.8%.
Technology stocks in the S&P 500 rallied 1%. The sector
suffered its worst day since Brexit during last week's selloff,
which was spurred by fears the administration would fail to deliver
corporate-friendly policies. Shares of Cisco Systems rose 1.2%.
News that Saudi Arabia and the U.S. were expected to agree to
business deals and potential investments valued at $300 billion
boosted a range of companies. Shares of Boeing added 1.6%, while
Lockheed Martin climbed 1.6%. Blackstone Group surged 6.7% after
Saudi Arabia agreed to commit $20 billion to the private-equity
giant's new infrastructure fund.
Shares of Ford Motor rose 2.1% following news Jim Hackett has
been named Ford's new chief executive.
U.S. crude rose 0.8% to $50.73 a barrel, its highest settle in a
month ahead of Thursday's meeting of the Organization of the
Petroleum Exporting Countries, where many expect an extension to
ongoing production cuts.
"I think $40-60 [a barrel] is a reasonably good sweet spot
markets are comfortable with," said Phil Orlando, chief equity
strategist at Federated Investors. It is a level where frackers can
make money, but not so high that it is overly inflationary or
reduces consumption, he said.
The yield on the benchmark 10-year U.S. Treasury note rose to
2.254% from 2.243% on Friday. Yields rise as prices fall.
Gold for May delivery gained 0.6% to close at $1260.70 an
ounce.
The Stoxx Europe 600 fell less than 0.1%.
Japan's Nikkei Stock Average climbed 0.5%. Hong Kong's Hang Seng
Index rose 0.9% to its highest close since 2015, while South
Korea's Kospi gained 0.7%, ending at a new record. Stocks in
Shanghai shed 0.5%.
Write to Alexander Osipovich at alexander.osipovich@dowjones.com
and Riva Gold at riva.gold@wsj.com
(END) Dow Jones Newswires
May 22, 2017 16:22 ET (20:22 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.