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Stocks: S&P Sneaks a Gain After Hitting New Highs on China Trade Worries

Published 11/18/2019, 03:48 PM
Updated 11/19/2019, 02:08 AM
© Reuters.

Investing.com – Stocks finished at new closing highs Monday and hit intraday highs in the process. The gains were modest, however, because of unease about whether a U.S.-China trade deal really will get done.

The S&P 500 hit a new high of 3,124.17 before falling back to a 1.6-point gain, or 0.05%, to 3,122.03. The index was held back by slumping energy stocks.

The Dow was up 0.11% after peaking at 28,040.97 in the morning. The Nasdaq Composite and Nasdaq 100 were up 0.11% and 0.16%, respectively. Both hit new highs earlier in the session.

In addition to the China concerns, the market was held back by declining energy stocks after oil prices fell. Also declining: industrial and pharmaceutical stocks.

Walt Disney (NYSE:DIS), UnitedHealth Group (NYSE:UNH) and Nike (NYSE:NKE) were among the Dow leaders. Chevron (NYSE:CVX), Caterpillar (NYSE:CAT) and Exxon Mobil (NYSE:XOM) were the weakest Dow stocks.

The U.S.-China negotiations appeared to be stalled, despite Trump Administration assurances last week that negotiations were progressing. Reports from Bloomberg News and CNBC over the weekend and Monday morning painted more complicated pictures of the status of the talks, with intense disputes in the Administration and Chinese pessimism a deal can be done.

The Administration did agree to a new 90-day extension that lets U.S. companies continue doing business with China's Huawei Technologies Co. as U.S. regulators continue crafting rules on telecommunications firms that pose national security risks. Chip stocks were initially higher on the new but fell back.

President Donald Trump and Treasury Steve Mnuchin met Monday with Federal Reserve Chairman Jerome Powell, who repeated the reasons why the Fed has decided to put interest-rate cuts hold. Trump later pronounced the meeting cordial. Interest rates moved lower, with the 10-Year Treasury yield falling to 1.815% from 1.834% on Friday.

Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Google parent Alphabet (NASDAQ:GOOGL), Applied Materials (NASDAQ:AMAT) and O’Reilly Automotive (NASDAQ:ORLY) were among stocks hitting new highs Monday.

U.S. stocks have been pushing higher because of strong consumer spending and low unemployment, coupled with low inflation.

The Dow finished Monday up 20.2% for the year after falling 5.6% in 2018. The S&P 500 is up 24.5% after a 6.2% gain in 2018. The Nasdaq's 2019 gain is now 28.9% after a 3.9% decline in 2918. The bulk of the stock market's 2018 losses came in the fourth quarter.

Bulls are very confident about the market going forward. Volatility indices have fallen 50% this year.

But the major averages are showing signs of getting ahead of themselves. Their relative strength indexes, a momentum gauge, are all above 70, with the Dow finishing Monday above 76. Both are signals that stocks may be overbought and vulnerable to sudden pullbacks. Apple's RSI was at 79 at Monday's close. Microsoft (NASDAQ:MSFT), which closed above $150 for the first time, has an RSI of 73. Walt Disney's RSI is at 71.

Chipmaker NVIDIA (NASDAQ:NVDA), brokerage Jefferies Financial Group (NYSE:JEF)l, broadcaster Discovery (NASDAQ:DISCA) and chipmaker Advanced Micro Devices (NASDAQ:AMD) were among the top S&P 500 stocks.

ABIOMED Inc (NASDAQ:ABMD), Cabot Oil & Gas (NYSE:COG), Noble Energy (NYSE:NBL) and Helmerich and Payne (NYSE:HP) were among the worst S&P 500 performers.

Latest comments

Frag....if you’re going to post on this board, please clean up your spelling, grammar, and punctuation. And speaking of “lol,” it would appear you went to the Dan Quail Spelling School. You know, the place where they tell you to add an “e” to a word where none belongs, as in Quail’s “potatoe” and your “egoes.”
sad to see this market can't run on its own, totally rely on the FED repo to hype it up. It adds an extra 1.3T into our debt geeze thx Trump
People still think stocks react to news? lol No trade deals for months, and highs after highs. People who call and post claimsa bout where xyz will go, or say Trump this or that have egoes, and having egoes ain‘t gonna bode well. Stop trolling.
news react to stocks right now..
I think stocks inly reacts to the China Roar. When China Roars, worldwide markets crumbles. When there is no China Roar, all stocks rally.
I told you guys ... Trump must know, he is not a franchise Quarterback. US can get a new Quarterback next year. China has a true francise Quarterback. They are building out a decade long road map that will let them win many playoffs.
oops
Wow...no need to be mad. We're just football fans here.
You are right. China owns the globe on production america can’t even come close unless we repeal labor laws. China doesn’t need a deal, trump does to win the election.
I told you guys ... the market right now depends on one thing and one thing alone. As long as Trump does not wandered into the Jungle and start poking her, we should be ok. If Trump just learned when she shows her fangs, he should backup slowly and retrieve.
Sneaks gains because of bad news? So confusing. Prices are pretty high right now, but can't find the melt up. Algos control everything.
Sneak gains because liquidity and fresh longs.
Tomorrow positive data in the US ......
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