Stocks spike to record highs as trade optimism, earnings provide spark

All three of the major averages closed at record highs on Monday as renewed trade hopes and strong earnings propelled stocks higher.

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The Dow Jones Industrial Average gained 114 points, or 0.42 percent, to book its first record close since July 23. The S&P 500 and Nasdaq finished in record territory for a second straight day.

TickerSecurityLastChangeChange %
I:DJIDOW JONES AVERAGES28004.89+222.93+0.80%
SP500S&P 5003120.46+23.83+0.77%
I:COMPNASDAQ COMPOSITE INDEX8540.828717+61.81+0.73%

President Trump celebrated the records in a tweet.

The record-setting day came after the Chinese Foreign Ministry said Trump and Chinese President Xi Jinping have remained in contact while negotiators craft the final language for the "phase one" of the trade agreement between the two economic powers.

McDonald's shares were lower after the company parted ways with CEO Steve Easterbrook over his consensual relationship with an employee. Easterbrook was instrumental in the company’s turnaround, emphasizing a technological shift that included third-party delivery through apps and the installation of kiosks that let customers customize their orders.

Meanwhile, Under Armour was sharply lower after confirming the Department of Justice and Securities and Exchange Commission are probing its accounting practices. The athletic-apparel maker reported better-than-expected third-quarter results on Monday morning but cut its sales outlook for the remainder of the year.

Ford gained after the United Auto Workers union approved the tentative labor deal that was reached last week.

TickerSecurityLastChangeChange %
MCDMCDONALD'S CORP.193.97-0.03-0.02%
UAUNDER ARMOUR INC15.97+0.41+2.63%
FFORD MOTOR COMPANY8.95+0.16+1.82%

Earnings reports continued to exceed Wall Street estimates, with over 70 percent of S&P 500 companies reporting, about 76 percent have topped earnings-per-share estimates and 59 percent have beat on revenue, according to Refinitiv.

The Warren Buffett-led Berkshire Hathaway reported third-quarter profit rose 14 percent versus a year ago to $7.86 billion as its cash pile swelled to a record $128.1 billion.

Elsewhere, the luxury automaker Ferrari beat on both the top and bottom lines, sending shares higher.

TickerSecurityLastChangeChange %
BRK.ABERKSHIRE HATHAWAY INC.329,405.00+103.00+0.03%
BRK.BBERKSHIRE HATHAWAY INC.219.74+0.38+0.17%
RACEFERRARI N.V.167.00+1.53+0.92%

Commodities gained with West Texas Intermediate crude oil up 0.57 percent at $56.52 a barrel and gold ended little changed near $1,510 an ounce.

Treasurys were lower as selling ran the yield on the 10-year note up 5.8 basis points to 1.786 percent.

Global stock markets followed Wall Street higher Monday after the unexpectedly strong U.S. jobs data helped to soothe investor worries. On Friday, the Labor Department said American employers added 128,000 jobs in October, better than the 89,000 forecast.

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In Europe on Monday, Germany's DAX all gained 1.35 percent to pace the advance.

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In Asia, the Shanghai Composite Index added 0.6 percent and Hong Kong's Hang Seng advanced 1.7 percent. Japan's markets were closed for a holiday.

FOX Business' Ken Martin and the Associated Press contributed to this article.