U.S. stocks closed higher Monday, with the Nasdaq doing much of the heavy lifting, as investors looked ahead to another week of high-profile earnings and developments in U.S.-China trade talks.
How did major indexes fare?
The Dow Jones Industrial Average DJIA, +0.70% rose 174.48 points, or 0.7%, to end at 25,239.37, while the S&P 500 index SPX, +0.68% gained 18.34 points, or 0.7%, to 2,724.87. The Nasdaq Composite Index added 83.67 points, or 1.2%, to close at 7,347.54.
What drove the market?
Investors will wade through more corporate earnings this week, with 97 members of the S&P 500 on tap along with one Dow component, Walt Disney Co. DIS, +0.45% reporting Tuesday.
More broadly, stocks continue to benefit from a dovish Federal Reserve after the central bank last week signaled rate increases were on hold until further notice.
U.S.-China trade talks will remain in focus as a March 1 deadline to avoid an increase on tariffs on Chinese imports looms. Upbeat comments by U.S. and Chinese officials have been credited with supporting stocks, but analysts said markets remain sensitive to headlines, with scrutiny likely to intensify as the deadline nears.
On the data front, U.S. factory orders fell by 0.6% in November, faster than the 0.2% drop expected by economists polled by MarketWatch.
What were analysts saying?
“We’re seeing a bit of consolidation of the recent gains,” Alec Young, managing director of global markets research at FTSE Russell told MarketWatch. “The market has been impressively resilient, and I think traders are now fixated on China trade and don’t want to make big bets until they get more clarity,” he said.
With the S&P 500 trading at 16 times projected 2019 earnings, “stocks are no bargain right now, and for it to go higher we need some assurance that headwinds from China will be less than expected,” he said.
“While there were good signs of the meeting between US and China last week, nothing concrete has been announced leaving the market vulnerable to antitrade statements,” said Alfonso Esparza, senior market analyst at Oanda, in a note.
Which stocks were in focus?
Shares of pizza chain Papa John’s International Inc. PZZA, +8.98% surged 9% after a $200 million investment by activist investment firm Starboard Value LP that will also see Starboard Chief Executive Jeffrey Smith become chairman of the chain.
Tesla Inc.’s stock TSLA, +0.22% rose 0.2% after the electric auto manufacturer announced it would acquire Maxwell Technologies Inc. MXW, +42.65% in a deal that would value the energy-solutions provider at $217.9 million.
Clorox Co. CLX, +5.69% shares rallied 5.7% after the consumer products company announced fiscal second-quarter earnings that surpassed Wall Street expectations.
Shares of Johnson Outdoors Inc. JOUT, -4.80% slid 4.8% after the seller of outdoor recreation equipment swung to a fiscal fourth-quarter loss, on a surprise decline in sales.
Sysco Corp. SYY, +4.83% climbed 4.8% after the food-products company announced fiscal second-quarter earnings that surpassed analysts predictions.
Shares of Ultimate Software Group Inc. ULTI, +19.69% soared 20% after it agreed to be bought by an investor group led by Hellman & Friedman in an all-cash deal valued at about $11 billion.
What were other markets doing?
Asian equities put in a mixed performance, with markets in several countries, including China and Korea, closed for Lunar New Year celebrations. Japan’s Nikkei 225 index NIK, +0.00% ended 0.5% higher.
European equities saw a mixed performance with the Stoxx 600 Europe index SXXP, +0.06% ending 0.1% higher.
Oil futures CLH9, +0.48%retreated, and gold GCG9, -0.19%settled lower. The ICE U.S. Dollar Index DXY, +0.01% which tracks the U.S. unit against a basket of six major rivals, edged up.
