Retailers and airlines lift US stocks higher

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Retailers and airlines lift US stocks higher

Consumer-focused companies and industrial stocks grabbed most of the gains.


Wall Street (AP Photo/Mary Altaffer, File)
Wall Street (AP Photo/Mary Altaffer, File)

Retailers and airlines helped lift US stocks broadly higher on Monday, extending the market’s gains from last week.

Consumer-focused companies and industrial stocks grabbed most of the gains. Banks and health care stocks also rose, while energy companies climbed with the price of US crude oil.

Technology companies lagged the broader market, weighing down the Nasdaq composite index for much of the day.

The market’s latest gains, while modest, added to what has been a mostly solid summer for stocks. The S&P 500, the market’s benchmark index, has posted a weekly gain in six of the past seven weeks.

On Monday, the S&P 500 rose 6.92 points, or 0.2%, to 2,857.05, and the Dow Jones Industrial Average climbed 89.37 points, or 0.3%, to 25,758.69.

The Nasdaq composite recovered from a morning slide, adding 4.68 points, or 0.1%, to 7,821.01, and the Russell 2000 index of smaller company stocks also rebounded, picking up 5.75 points, or 0.3%, to 1,698.69.

Stocks got off to a mixed start as investors weighed the latest corporate earnings and deal news.

Since last week investors have been feeling cautiously optimistic about the prospects for an end to the trade dispute between the US and China, which has led to costly, duelling tariffs between the two nations and caused uncertainty in the markets.

Hopes rose late last week on news that China will send an envoy to Washington this month to discuss a way out of the stand-off before President Donald Trump and Chinese leader Xi Jinping meet in November.

“Is there motivation to get it resolved before November? Sure, but it’s not going to be resolved any time soon,” said Tom Martin, senior portfolio manager with Global Investments.

“It’s going to continue to be an overhang and there’s going to be a lot of posturing before any real deals are reached.”

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On Monday, investors bid up shares in consumer-focused companies, with several big department store chains leading the way.

Macy’s was the biggest gainer in the S&P 500, vaulting 6.1% to 38.21 dollars. Kohl’s picked up 3.2% to 78.85 dollars, Nordstrom rose 4% to 61.56 dollars, and Gap gained 2.8% to 32.17 dollars.

Airlines climbed as part of a broader rise in industrial sector stocks. American Airlines Group jumped 5.8% to 39.99 dollars, United Continental gained 3.9% to 85.22 dollars, and Southwest Airlines rose 3.3% to 61.63 dollars.

Estee Lauder climbed 3.4% to 140.56 dollars after the cosmetics company reported quarterly results that topped Wall Street’s forecasts. The company benefited from better-than-expected global sales, particularly in Asia.

Traders also welcomed the latest corporate deal news.

SodaStream jumped 9.4% to 142.11 dollars after PepsiCo agreed to buy the Israeli maker of carbonated drink machines for 3.2 billion dollars. China Biologic Products Holdings surged 8.7% to 100 dollars after the company received a takeover offer from an investor group for 118 dollars a share in cash.

Technology stocks, which have outperformed other sectors this year, slumped on Monday. Intel fell 1.3% to 46.50 dollars.

“The biggest thing you’re seeing is the continued divergence between growth and value (stocks),” said Mr Martin, noting that investors have lately been rotating portfolios to favour value stocks more than growth stocks, such as technology, which finished slightly lower on Monday.

“The valuation of technology stocks is high, relative to other areas.”

US benchmark crude rose 0.8% to settle at 66.43 dollars per barrel in New York. Brent crude, the standard for international oil prices, added 0.5% to close at 72.21 dollars per barrel in London.

The pick-up in oil prices helped lift energy sector stocks. Baker Hughes gained 3.2% to 32.01 dollars.

Bond prices rose. The yield on the 10-year Treasury fell to 2.82% from 2.87% late Friday.

The dollar fell to 110.23 yen from 110.60 yen late on Friday. The euro strengthened to 1.1467 dollars from 1.1443.

Gold rose 0.9% to 1,194.60 dollars an ounce, silver added 0.3% to 14.67 dollars an ounce, and copper gained 1.5% to 2.69 dollars a pound.

In other energy futures trading, heating oil rose 0.7% to 2.11 dollars a gallon, wholesale gasoline gained 1.7% to 2.02 dollars a gallon, and natural gas fell 0.2% to 2.94 dollars per 1,000 cubic feet.

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