US stocks bounced back on Monday after the S&P 500 closed the previous session at a two-month low, in a broad rally led by recently beaten-down bank and technology shares. Market focus shifted from geopolitical tension to earnings, with several Dow components, including Goldman Sachs, General Electric and Johnson & Johnson, scheduled to release results later this week.Stock trading volume was the lightest for a single session so far this year.
Stocks rebounded after investors last week sought safe-haven assets due to geopolitical tensions, mainly out of Syria and North Korea.”The market started out on an up note because we went through the weekend without significant global turmoil,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.”This is the unwinding (of) the defensiveness with which we went into the long weekend.”
Tuz said strong bank earnings last week kept the group in investors’ favor, and there is support for stocks from expectations that overall earnings for the S&P 500 will be “pretty robust.”At the closing bell on Monday, the Dow Jones Industrial Average rose 183.67 points, or 0.9 percent, to 20,636.92, the S&P 500 gained 20.06 points, or 0.86 percent, to 2,349.01 and the Nasdaq Composite added 51.64 points, or 0.89 percent, to 5,856.79.
The technology sector of the S&P 500 closed up for the first time in 11 sessions. Financials rose for the second time in the same period.Profits of S&P 500 companies are estimated to have risen 10.4 percent in the latest quarter, the first double-digit percentage growth since the third quarter of 2014, according to Thomson Reuters I/B/E/S.
S&P 500 component Netflix, which reported results after the bell, was up 3.0 percent to $147.25 during the regular session but fell 2.1 percent after the bell.Amazon was the largest points gainer on the S&P 500, up 2.0 percent to $901.99 after Credit Suisse raised its price target to $1,050 from $900.Credit Suisse also raised its price target on Boeing, sending the aircraft maker’s shares up 1.9 percent to $179.02.
Incyte Corp tumbled 10.5 percent to $126.07, while Eli Lilly dropped 4.1 percent to $82.38 after the companies said on Friday the U.S. drug regulator declined to approve a new drug for rheumatoid arthritis from the two partners.Despite the refocus on earnings, the market could still be rattled by geo-political sabre-rattling.U.S. Vice President Mike Pence put North Korea on notice on Monday, warning that recent U.S. military strikes in Syria and Afghanistan showed the resolve of President Donald Trump should not be tested.
Advancing issues outnumbered declining ones on the NYSE by a 2.93-to-1 ratio; on Nasdaq, a 2.36-to-1 ratio favored advancers.The S&P 500 posted 14 new 52-week highs and 1 new low; the Nasdaq Composite recorded 32 new highs and 49 new lows. About 5.31 billion shares changed hands in U.S. exchanges, compared with the 6.4 billion daily average over the last 20 sessions.