S&P 500 hits high on Mexico trade deal
A broad-based rally has pushed the S&P 500 and the Nasdaq to record high closes for the second straight session as a trade agreement reached between the US and Mexico buoyed investor sentiment.
Technology stocks led the Nasdaq above the 8,000 mark for the first time, and the sector provided the biggest boost to the S&P 500.
A senior US trade official on Monday announced a deal with Mexico to replace the North American Trade Agreement and said talks with Canada were expected to begin immediately.
The upbeat trade outlook was further boosted by news that Washington was pressuring the EU to accelerate tariff talks.
Disputes between the US and its trading partners have been a drag on investor sentiment for much of the year despite solid economic fundamentals and two robust quarters of corporate earnings.
"It takes a long time for people to come out of the concerns related to those thousand-point down days and feel a little bit more comfortable," said Robert Pavlik, chief investment strategist at SlateStone Wealth in New York.
"And the trade concerns and the tariffs, that played a part in it, that's what held it back," he added.
"People are feeling a little bit more positive."
Matt Blunt, president of the American Automotive Policy Council, said he was optimistic about the trade deal. Shares of Ford Motors were up 3.2 per cent while General Motors rose 4.8 per cent.
Tariff-sensitive companies Boeing and Caterpillar were up 1.2 per cent and 2.8 per cent, respectively, leading the industrial sector's advance and pulling the Dow higher.
The Mexico-focused iShares MSCI Mexico ETF was up 2.1 per cent.
The Dow Jones Industrial Average rose 259.29 points, or 1.01 per cent, to 26,049.64, the S&P 500 gained 22.05 points, or 0.77 per cent, to 2,896.74 and the Nasdaq Composite added 71.92 points, or 0.91 per cent, to 8,017.90.
Of the 11 major sectors of the S&P 500, nine ended the session in positive territory, with the biggest percentage gains in materials, financials and industrials.
Defensive utilities and real estate sectors were the only percentage losers.
Tesla stock dipped 1.1 per cent, paring earlier losses following news that chief executive Elon Musk was scrapping his scheme to take the electric car maker private.
Chipotle Mexican Grill was the biggest percentage loser in the S&P 500, down 4.8 per cent after Wedbush downgraded the burrito chain's shares.
Luxury retailer Tiffany & Co ended the session down 1.3 per cent ahead of its second-quarter earnings report expected early on Tuesday.
Advancing issues outnumbered declining ones on the NYSE by a 1.80-to-1 ratio; on Nasdaq, a 1.29-to-1 ratio favoured advancers.
The S&P 500 posted 54 new 52-week highs and no new lows; the Nasdaq Composite recorded 159 new highs and 31 new lows.
Volume on US exchanges was 6.19 billion shares, compared with the 6.27 billion average over the last 20 trading days.
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