Global Stocks Rise, but Boeing Drags Dow Industrials Lower--Update
March 11 2019 - 1:08PM
Dow Jones News
By Jessica Menton and Will Horner
U.S. stocks rose Monday, powered by gains in technology
shares.
The Dow Jones Industrial Average climbed 92 points, or 0.4%, to
25541. The S&P 500 advanced 1.2% and the tech tech-heavy Nasdaq
added 1.7%.
Tech shares in the S&P 500 advanced 2% after Nvidia Corp.
agreed to buy computer-networking supplier Mellanox Technologies
Ltd. in an all-cash deal valued at roughly $7 billion. Nvidia's
shares rose 5.9% while Mellanox's shares jumped 8.3%.
Shares of tech companies, the darlings of the stock market in
recent years, were pummeled in the bruising fourth-quarter selloff
amid worries about the health of the now 10-year-old bull market
for stocks. But shares have broadly bounced back this year, with
the tech sector up 15% so far this quarter.
"There may have been too much of a run up from a valuation
perspective in technology stocks, but they're still a growth
engine," said Ron Weiner, managing partner and director at RDM
Financial Group at HighTower. "They probably sold off a little too
much recently, but long term as an industry they're well positioned
because technology is the future."
Apple shares rose 3.3%, among the biggest gains in the Dow
industrials. Shares of Boeing dragged on the blue-chip index,
slumping 6.7% after China and Indonesia grounded all of their
Boeing 737 Max 8 aircraft following Sunday's deadly crash of an
Ethiopian Airlines jet of the same type.
Shares of other aerospace and defense companies mostly rose.
United Technologies, Textron and Arconic each ticked up around 1%
apiece.
The pull back in Boeing is likely short-term and could mark a
buying opportunity for investors, according to Mr. Weiner.
"Boeing is in the catbird seat," Mr. Weiner said. "More people
are entering the middle class and they're traveling. There needs to
be more airplanes and there are only two major manufacturers."
Monday's gains came after questions about the health of the
world economy prompted stock declines Friday. A dramatic slide in
Chinese exports and the lackluster U.S. jobs report led Wall Street
to close out its worst week since December.
Hopes were lifted that a U.S.-China trade could soon be reached
after Beijing's top central banker said Sunday that China had
agreed not to devalue its currency to support its exporters.
The yuan's decline in 2018 had raised concerns in Washington
that China was pushing down its value to offset U.S. tariffs on
Chinese products, and had been a key sticking point for U.S. trade
negotiators.
While the trade issue remained at the forefront of investors'
concerns, Geoffrey Yu, head of the investment office at UBS Wealth
Management, said some were beginning to see a possible
resolution.
"It seems like the market is starting to move on from this,
pricing in significant good news," he said.
U.S. consumers ramped up their spending in January, a sign of
solid economic growth in the first quarter following a mixed jobs
report Friday that raised fresh concerns about U.S. growth.
"The retail numbers were relatively good, signaling the consumer
is alive and well," said John Carey, managing director and
portfolio manager at Amundi Pioneer. "People are hopeful that the
economic recovery is going to continue and we're not going into a
recession."
Comments from Jerome Powell in a televised interview Sunday also
offered investors some comfort. He said the U.S. economic outlook
was favorable and doesn't require higher or lower interest rates
for now.
The Stoxx Europe 600 rose 0.8%. The British parliament is set to
vote on Prime Minister Theresa May's Brexit deal on Tuesday, with
expectations high that it will be rejected for a second time, and
further votes on Wednesday and Thursday likely.
The WSJ Dollar Index, which tracks the U.S. currency against a
basket of 16 peers, was broadly flat. The yield on 10-year
Treasurys rose to 2.643%, from 2.627% Friday. Yields rise as bond
prices fall.
China's indexes advanced following sharp declines at the end of
last week. The Shenzhen A Share Index jumped 3.9% and Hong Kong's
Hang Seng rose 1%.
Write to Jessica Menton at Jessica.Menton@wsj.com
(END) Dow Jones Newswires
March 11, 2019 12:53 ET (16:53 GMT)
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