Stocks - Trade Optimism Sends Wall Street to New Highs
Investing.com
Published Nov 25, 2019 03:55PM ET
Updated Nov 25, 2019 05:06PM ET
Investing – Stocks started Thanksgiving week with a solid rally Monday, the second in two trading sessions, led by technology and health stocks.
The rally saw the Dow Jones industrials, S&P 500 and Nasdaq Composite hit new closing highs. The S&P 500, Nasdaq and Nasdaq 100 indexes hit new intraday highs and the Russell 2000 index hit a 52-week high.
The Dow's 300-point swing between Friday and Monday brought the blue-chip index to within about 24 points of its all-time high of 28,090.21.
The S&P 500 finished up 0.75%. The Dow added 0.68%. The Nasdaq was up 1.32%, and the Nasdaq 100 was up 1.21%. The Russell was even stronger with a 2% gain.
The catalyst seemed to be more optimism about a U.S.-China trade deal and perhaps a market perception that an impeachment effort to remove President Donald Trump from office will fall short.
The trade optimism, which fueled the Russell's big gain, was based on a call by Chinese officials for speeding up new penalties and punitive action for infringement of patents and copyrights.The proposal was published over the weekend. The issue is key for U.S. tech companies, especially smaller tech companies trying to scale up their businesses.
In addition, Reuters reported a Chinese state-backed tabloid said Beijing and Washington were "very close" to an initial pact.
Tech stocks were also buoyed by a big gain in Nvidia (NASDAQ:NVDA), which builds graphics chips used in games and in data centers. Nvidia helped the Philadelphia Semiconductor Index rise 2.43%.
Health stocks moved higher, led by UnitedHealth Group (NYSE:UNH).
The rally was quite broad, with 10 of the 11 S&P 500 sectors showing gains. The only decliner was the utilities sector, down 1.37% as investors were more confident in taking on more risk.
Among those that benefited from the optimism was Bed Bath & Beyond (NASDAQ:BBBY), up 8.3% after a Bank of America/ Merrill analyst said the odds of a turnaround for the home wares retailer have improved greatly since the company hired Mark Tritton as its CEO in October. The shares are up nearly 86% since bottoming in August.
Among stocks hitting new 52-week highs were Amgen (NASDAQ:AMGN), Buckle (NYSE:BKE), General Electric (NYSE:GE), JPMorgan Chase (NYSE:JPM) and RH (NYSE:RH).
Upscale jeweler Tiffany (NYSE:TIF) was up 6.2% after the venerable retailer agreed to sell out to French luxury-brand company LVMH (OTC:LVMUY) for $16.2 billion.
If there was a downside to the rally is that it is exhibiting signs of frothiness. The relative strength indexes for the S&P 500 and the Nasdaq finished above 70 on Monday, a signal the market is getting overbought.
Apple's (NASDAQ:AAPL) RSI was 71 on Monday after the shares rose 1.75%. Microsoft (NASDAQ:MSFT), up 1.1%, hit a new all-time high of $151.35, saw its RSI finish the day at 73.
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Crude oil rose modestly. Gold was lower. Interest rates also moved lower. The 10-year Treasury yield fell to 1.75% from Friday's 1.774%.
Women's apparel company L Brands (NYSE:LB), Tiffany (NYSE:TIF), biotech company Incyte (NASDAQ:INCY) and Nvidia (NASDAQ:NVDA) were the top S&P 500 performers on the day.
Cable-and-broadcast giant Comcast (NASDAQ:CMCSA), Jacobs Engineering (NYSE:JEC), food processor JM Smucker (NYSE:SJM) and IDEXX Laboratories (NASDAQ:IDXX), which specializes in animal health markets, were among the worst S&P 500 performers on Monday.
Written By: Investing.com
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