MARKET SNAPSHOT: Dow Poised To Reclaim 22,000 As Geopolitical Fears Ebb
Tesla shares rise on Baird upgrade
U.S. stocks rose on Monday with the Dow flirting with the psychologically important 22,000 level as technology and financial shares led a broad move higher.
The Dow Jones Industrial Average rose 144 points, or 0.7%, to 22,002, powered by rallies in Goldman Sachs Group Inc.(GS) and Visa Inc.(V) shares.
The S&P 500 added 24 points, or 1%, to 2,466, with all 11 sectors gaining on the day. The biggest advancers were technology shares (XLK), up 1.5%, and financials (XLF), up 1.4%. If the large-cap index is poised for its first 1% gain since April 24.
The Nasdaq Composite Index advanced 81 points, or 1.3%, to 6,337.
"After some short term knee jerk reactions last week, the market is having that moment of clarity rally--earnings are marching forward, the economy is strengthening, [and] global economic conditions are gaining steam," said Karyn Cavanaugh, senior market strategist at Voya Financial.
Last week's decline was driven in large part by fears over North Korea, where tensions with the U.S. have been escalating. That issue overshadowed the equity market, where earnings have been viewed as strong at a time of high employment and low inflation, as well as valuations that appear elevated by many metrics.
The S&P 500 lost 1.4% last week, while the Nasdaq Composite Index gave up 1.5%. The week marked the biggest one-week percentage drop for both the Dow and the S&P since March, as well as the biggest for the Nasdaq since June, although it was also the Nasdaq's third straight weekly loss.
"Of course there's still caution with the geopolitical situation, so while today may be fairly stable, we're just one headline or tweet away from more volatility. At the same time, the earnings season was tremendously strong, and re-evaluating that and buying on last week's weakness," said Peter Andersen, chief investment officer at Fiduciary Trust Co.
Read more:Bruising stock-market selloff may have cracked the rally's foundation (http://www.marketwatch.com/story/bruising-stock-market-selloff-may-have-cracked-the-rallys-foundations-2017-08-11)
Secretary of Defense James Mattis and Secretary of State Rex Tillerson over the weekend sought to play down the risk of a conflict, writing in The Wall Street Journal that the Trump administration is seeking diplomatic solutions (http://nation.foxnews.com/2017/08/13/mattis-and-tillerson-were-holding-pyongyang-account) to achieve the "irreversible denuclearization" of North Korea.
Monday's rally returned the S&P and Nasdaq above their 50-day moving averages, in the latest example of investors using any decline as an opportunity to buy on the dip (http://www.marketwatch.com/story/a-problem-for-buy-the-dip-investors-no-dips-to-buy-2017-08-08).
President Donald Trump on Monday spoke out against white supremacists (http://www.marketwatch.com/story/trump-calls-racism-evil-and-says-white-supremacists-are-repugnant-2017-08-14), including the Ku Klux Klan, after his initial response to the deadly violence in Charlottesville, Va., was widely criticized as being insufficient. One person was killed and nearly 20 were injured at the rally on Saturday.
Analysts said that while market participants were likely following the events, they would have little direct impact on equities.
"What happened in Charlottesville isn't directly relevant to markets, but it is relevant to how deeply divisive the country is in terms of politics, which is something that could become more relevant to markets," Andersen said.
See also:This 'warning siren is blaring,' but that's not stopping the Wall Street hype machine (http://www.marketwatch.com/story/this-warning-siren-is-blaring-but-thats-not-stopping-the-wall-street-hype-machine-2017-08-14)
Individual movers: Shares in Tesla Inc.(TSLA) rose 1.8% after Baird analyst Ben Kallo--a longtime Tesla bull (http://www.marketwatch.com/story/heres-why-tesla-is-bairds-top-stock-market-pick-for-2017-2016-12-30)--hiked his price target for the electric-car maker's stock to $411 (http://www.marketwatch.com/story/tesla-price-target-lifted-to-411-at-baird-who-says-dont-short-ahead-of-model-3-2017-08-14) from $368.
Apple Inc.(AAPL) and Aetna Inc.(AET) both rose following a report that the two companies are discussing offering Apple's fitness-tracking smartwatch to the insurer's 23 million members (http://www.marketwatch.com/story/aetna-in-talks-with-apple-to-offer-apple-watch-to-its-23-million-members-report-2017-08-14) at a discounted rate.
Chip makers were among the biggest gainers of the day, leading the overall technology sector higher. Micron Technology (MU) added 3.5% while Advanced Micro Devices Inc. (AMD) was up 4.4%. The PHLX Semiconductor Index gained 2.3%.
Netflix Inc.'s stock (NFLX) traded 0.2% lower after a Barron's cover story over the weekend warned the stock could drop more than 50% as "Disney goes its own way and Amazon looms (http://www.barrons.com/articles/the-trouble-with-netflix-1502510711?mod=mktw)," referring to a Netflix-Disney distribution deal that's ending and the threat from Amazon.com Inc.'s (AMZN) streaming business.
Don't miss:Netflix will survive the Disney cord-cut, and here's the proof: Piper Jaffray (Netflix will survive the Disney cord-cut, and here's the proof:Piper%20Jaffray)
And in other Netflix news, the streaming giant has recruited prolific TV producer Shonda Rhimes (http://www.marketwatch.com/story/netfix-poaches-producer-shonda-rhimes-from-abc-in-a-volley-lobbed-at-hollywood-2017-08-14), the creator of hits such as "Grey's Anatomy" for Walt Disney Co.'s (DIS) ABC, in a sign of an arms race for talent.
Merck & Co. (MRK) rose 0.5%. Kenneth Frazier, the company's chief executive, said he was resigning from the president's American Manufacturing Council (http://www.marketwatch.com/story/merck-ceo-to-resign-from-presidents-american-manufacturing-council-two-days-after-charlottesville-violence-2017-08-14) following Saturday's deadly violence at a white supremacist rally in Charlottesville, Va.
Economic news: There are no top-tier U.S. economic reports expected Monday, and no Federal Reserve officials are due to speak.
Tuesday should bring U.S. retail sales data for July, and minutes from the Fed's last policy meeting are on tap for Wednesday.
And read:MarketWatch's Economic Calendar (http://www.marketwatch.com/economy-politics/calendars/economic)
Other markets: European equities gained and Asian markets mostly closed higher (http://www.marketwatch.com/story/asian-markets-mostly-higher-as-north-korea-rhetoric-settles-down-2017-08-13). Oil futures fell sharply (http://www.marketwatch.com/story/oil-prices-head-for-3-week-low-as-supply-worries-persist-2017-08-14) while a key dollar index advanced modestly.
--Victor Reklaitis contributed to this article.
(END) Dow Jones Newswires
August 14, 2017 14:17 ET (18:17 GMT)