Tech leads US stocks broadly higher; Boeing drops

A broadly rally led by technology companies drove U.S. stocks sharply higher Monday, giving the S&P 500 its biggest increase since late January.

The latest gains also snapped a five-day losing streak for the benchmark index, which was coming off its worst weekly stumble this year.

Nvidia was the S&P 500’s strongest performer after agreeing to buy chipmaker Mellanox. Apple benefited from an analyst upgrade. A sharp decline in Boeing stemmed the gain for the Dow Jones Industrial Average.

Investors drew encouragement from a report showing a slight increase in U.S. retail sales for January after a steep decline in December, and from new data showing a rebound in Chinese exports this month, said Tom Martin, senior portfolio manager with Globalt Investments.

“The data that’s coming in today is at the margin at least OK; there’s no negative news,” Martin said. “People want to be in the market. Rates are low. Stocks are OK.”

The S&P 500 gained 40.23 points, or 1.5 per cent, to 2,783.30. The Dow rose 200.64 points, or 0.8 per cent, to 25,650.88. The average bounced back after declining 242 points as shares in Boeing slumped.

The Nasdaq composite, which is heavily weighted with technology stocks, jumped 149.92 points, or 2 per cent, to 7,558.06. The Russell 2000 index of smaller companies picked up 26.99 points, or 1.8 per cent, to 1,548.88.

Major European stock indexes finished higher.

Monday’s gains helped the market reclaim the momentum it had in January and February, when it posted the best two-month start to a year since 1991. Despite stocks posting their worst week since December last week, the S&P 500 and Nasdaq are showing double-digits gains for the year so far, and the Dow is just shy of a 10 per cent increase.

Investors are still waiting for more details on any potential trade deal between the U.S. and China. Costly tariffs have hurt both nations and investors hope a deal can be struck to at least take some pressure off the global economy, which has shown signs of cooling off.

“Last week was a little bit of a breather and investors said, ‘Well, maybe we overreacted a little bit,’” said Karyn Cavanaugh, senior markets strategist at Voya Investment Management. “We have good economic data, earnings should be pretty solid, and the Fed is on hold. We potentially have progress going on with China. So overall, things are pretty good and stocks are the place to be.”

Technology sector stocks drove Monday’s rally, with chipmakers leading the way.

Nvidia jumped 7 per cent after the chipmaker said it will buy network transmission company Mellanox for $6.9 billion in cash.

The companies are frequent collaborators and said that together they help to power more than 250 of the world’s 500 supercomputers, including Sierra and Summit, operated by the U.S. Department of Energy.

Apple gained 3.5 per cent after receiving an analyst upgrade.

Boeing’s stock slumped 5.3 per cent following the second deadly crash involving the newest version of the aircraft maker’s popular 737.

An Ethiopian Airlines jetliner went down Sunday, killing 157 people. Back in October, another 737 Max 8 crashed in Indonesia, killing 189 people. Authorities in Ethiopia, China and Indonesia have grounded all Boeing 737 Max 8 aircraft.

Boeing’s stock had been soaring. On Monday, shares slid more than 13 per cent at one point. It was the only stock in the Dow to close with a loss. Despite Boeing’s decline, the industrial sector managed to post a gain.

Gains in health care stocks also helped drive the market higher. Align Technology rose 5.4 per cent.

Social media companies also notched gains. Facebook added 1.5 per cent and Twitter picked up 2.8 per cent.

Germany’s Deutsche Bank rose 5 per cent following reports that it agreed to hold merger talks with rival Commerzbank.

Benchmark U.S. crude climbed 1.3 per cent to settle at $56.79 per barrel. Brent crude, the international standard, rose 1.3 per cent to close at $66.58 per barrel.

Bond prices fell. The yield on the 10-year Treasury note rose to 2.64 per cent from 2.62 per cent late Friday.

The dollar strengthened to 111.21 Japanese yen from 111.07 yen late Friday. The euro fell to $1.1240 from $1.1242.

Gold dropped 0.6 per cent to $1,291.10 an ounce. Silver lost 0.5 per cent to $15.27 an ounce. Copper added 0.3 per cent to $2.90 a pound.

In other energy futures trading, wholesale gasoline gained 1.3 per cent to $1.83 a gallon. Heating oil dropped 0.3 per cent to $1.99 a gallon. Natural gas slid 3.2 per cent to $2.77 per 1,000 cubic feet.