By Wallace Witkowski, MarketWatch , Ryan Vlastelica
Traders reposition risk after no new North Korea nuke test
U.S. stocks bounced back on Monday to close near session highs,
halting three straight sessions of declines for major benchmarks,
as banks enjoyed their best daily rally in six weeks.
The Dow Jones Industrial Average rose 183.67 points, or 0.9%, to
close at 20,636.92, led by gains in shares of Boeing Co. (BA), J.P.
Morgan Chase & Co.(JPM) and Nike Inc.(NKE).
The S&P 500 advanced 20.06 points, or 0.9%, to finish at
2,349.01, as all 11 sectors traded higher, led by gains in
financial, real estate and industrial stocks. A popular way to bet
on bank moves, the Financial Select Sector SPDR ETF (XLF), which
tracks the S&P 500's financials, rose 1.8% to post its best
daily rise sine March 1, according to FactSet data.
The Nasdaq Composite Index gained 51.64 points, or 0.9%, to
close at 5,856.79, with shares of Nvidia Corp.(NVDA) closing up
nearly 4%, and Amazon.com Inc.(AMZN) shares rising 2%.
Monday's climb comes as corporate earnings get under way and as
geopolitical tensions, notably those between the U.S. and North
Korea, have heightened worries about aggressions escalating into a
nuclear confrontation.
Over the weekend, North Korea put on a massive military parade,
followed by a failed missile launch. In an unannounced visit to the
Korean Peninsula's demilitarized zone, U.S. Vice President Mike
Pence on Monday warned North Korea "not to test" the resolve of
President Donald Trump
(http://www.marketwatch.com/story/pence-warns-north-korea-not-to-test-trump-2017-04-17-6103315)or
the military strength of the U.S.
Equities have been struggling for direction, with investors
looking for confirmation that higher valuations--repeat record
highs for major indexes sparked by President Donald Trump's
election--will be justified by economic activity. Early reads from
big banks so far have been encouraging
(http://www.marketwatch.com/story/jp-morgan-profit-beats-estimates-trading-up-17-2017-04-13),
but markets could be vulnerable to broader disappointment, market
strategists said.
Dozens of companies will be reporting this week as the earnings
season ramps up, including Dow component Goldman Sachs Group
Inc.(GS).
"From a short-term perspective, we worked off a lot of the
euphoria that came after the election, though the decline was
pretty shallow. But while valuations are still way too high, stocks
remain the only game in town if you're looking at them versus
bonds," said Paul Nolte, portfolio manager at Kingsview Asset
Management.
See more:Stocks ride into North Korea 'danger zone' before
Monday open
(http://www.marketwatch.com/story/stocks-ride-into-north-korea-danger-zone-before-monday-open-2017-04-15)
The lack of a nuclear test from North Korea over the weekend did
much to reverse defensive positions adopted by traders heading into
the weekend, said Ian Winer, director of equity trading at Wedbush
Securities, in an interview. But, as with Thursday's preholiday
trading, volumes are light again Monday.
Separately, investors digested news of a recent U.S. bombing
mission over Afghanistan and the fallout from an election in Turkey
(http://www.marketwatch.com/story/turkeys-erdogan-claims-victory-in-referendum-to-grant-him-broad-new-powers-2017-04-16)
that gave the office of President Recep Tayyip Erdogan additional
powers, sparking protests.
"These issues, based on where they stand right now, probably
aren't the biggest focus for investors. However, they are pivoting
the Trump administration away from a domestic agenda. If that means
further delays on initiatives like tax reform, that could become a
worry for Wall Street," Nolte said.
Read: U.S. defense stocks easily outperform the broader market
(http://www.marketwatch.com/story/us-defense-stocks-easily-outperform-the-broader-market-2017-04-17)
Stocks crept to their highs of the day following comments from
Treasury Secretary Steven Mnuchin to the Financial Times
(https://www.ft.com/content/2e48c5bc-238c-11e7-8691-d5f7e0cd0a16)
that a tax reform plan on President Trump's desk before August was
"highly aggressive to not realistic at this point."
In the latest economic data, a gauge of New York-area
manufacturing
(http://www.marketwatch.com/story/empire-state-manufacturing-survey-slows-in-april-2017-04-17)
slowed considerably in April, retreating from a two-year high. A
reading on home-builder sentiment
(http://www.marketwatch.com/story/home-builder-sentiment-weakens-in-april-from-11-year-high-2017-04-17)
slipped in April, falling modestly from an 11-year high, though it
remains in notably positive territory.
Additionally, March retail sales data, released Friday when
markets were closed, posted their worst two-month stretch in two
years
(http://www.marketwatch.com/story/retail-sales-post-worst-two-month-stretch-in-two-year-2017-04-14),
while March consumer prices fell for the first time in over a year
(http://www.marketwatch.com/story/inflation-falls-for-first-time-in-13-months-cpi-shows-2017-04-14).
Fed Vice Chairman Stanley Fischer was set to speak on Fed
communication at Columbia University in New York at 5 p.m.
Eastern.
Stock movers: Netflix shares closed up 3% ahead of earnings,
which were set for the close of trade on Monday.
Read:United Airlines earnings: can profit beat expectations for
fifth-straight quarter?
(http://www.marketwatch.com/story/united-earnings-eps-set-to-fall-for-fifth-straight-quarter-2017-04-12)
Read:This is how long it could take for United to recover from
its PR disaster
(http://www.marketwatch.com/story/this-is-how-long-it-could-take-for-united-to-recover-from-its-pr-disaster-2017-04-14)
Shares of MoneyGram International Inc.(MGI) climbed 7.8% after
the Alibaba Group Holding Ltd.(BABA) - controlled Ant Financial
Services lifted its bid for the U.S. money-transfer unit to around
$1.2 billion
(http://www.marketwatch.com/story/alibaba-unit-battles-for-moneygram-upping-offer-to-around-12-billion-2017-04-17).
Shares of Alibaba rose 1.4%.
In other deal news, Ashland Global Holdings Inc. (ASH) said it
would buy Pharmachem Laboratories Inc. for $660 million
(http://www.marketwatch.com/story/ashland-global-to-acquire-pharmachem-laboratories-for-660-million-2017-04-17),
while Blackstone Energy said it would buy EagleClaw Midstream
Ventures for $2.1 billion in debt. Shares of Ashland rose 2%.
Both Eli Lilly & Co. (LLY) and Incyte Corp. (INCY) tumbled
after the Food and Drug Administration failed to approve a drug
(http://www.marketwatch.com/story/eli-lilly-and-incyte-say-fda-failed-to-approve-their-rheumatoid-arthritis-drug-2017-04-14)
designed to treat moderate-to-severe rheumatoid arthritis. While
Eli Lilly affirmed its outlook, Incyte said it was evaluating the
impact the news would have on its results. Shares of Eli Lilly lost
4.1%, while Incyte dropped nearly 11%.
OncoMed Pharmaceuticals Inc. (OMED) said that its small-cell
lung cancer drug had missed its primary and secondary endpoints
(http://www.marketwatch.com/story/oncomed-stock-halted-after-lung-cancer-drug-misses-in-mid-stage-clinical-trial-2017-04-17)
in a mid-stage clinical trial. Shares sank to close down 17%.
Other markets: European stocks were closed Monday for an
extended Easter break
(http://www.marketwatch.com/story/when-are-european-stock-markets-closed-for-the-easter-holiday-2017-04-12),
while much of Asia was also shut. The Shanghai Composite Index fell
0.7%
(http://www.marketwatch.com/story/asia-stocks-fall-on-china-regulatory-crackdown-north-korea-tensions-2017-04-17)
after China's country's securities regulator urged tighter
supervision of listed companies.
Gold prices
(http://www.marketwatch.com/story/gold-hangs-near-5-12-month-high-as-global-tensions-driven-haven-demand-2017-04-17)
settled up 0.3% at $1,291.90 an ounce, while crude-oil prices
(http://www.marketwatch.com/story/oil-prices-push-lower-on-us-supply-and-as-investors-cash-in-on-recent-gains-2017-04-17)
(http://www.marketwatch.com/story/oil-prices-push-lower-on-us-supply-and-as-investors-cash-in-on-recent-gains-2017-04-17)finished
down 1% at $52.65 a barrel after data Thursday showed the 13th
weekly rise in a row in the number of active U.S. oil rigs.
Read:OPEC faces 'lose-lose' decision on extending oil production
curbs
(http://www.marketwatch.com/story/opec-faces-lose-lose-decision-on-extending-oil-production-curbs-2017-04-14)
The dollar fell 0.2% against major rivals.
--Barbara Kollmeyer in Madrid contributed to this article.
(END) Dow Jones Newswires
April 17, 2017 16:40 ET (20:40 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.