US stocks opened strongly on news of mega deals from President Trump’s tour to Saudi Arabia after falling off a cliff last week. Technology and defence were the locomotives of Nasdaq and S&P 500 pulling the indices to gains of 0.82% (6,133.62) and 0.52% (2394.02) respectively. The Dow Jones closed +0.43% to 20,894.83.
- Dow Jones Index 20,894.83 +0.43%
- S&P 500 2394.02 +0.52%
- Nasdaq 6,133.62 +0.82%
- Russell 2000 1377.14 0.72%
- NYSE Composite 11585.21 +0.37%
- Gold 1260.00 +0.51%
- Oil 50.73 0.8%
Record arms deal push defence stocks
Defence sector surged in response to a record breaking arms deal over the weekend between President Trump and Saudi Arabia. The $110 bn package is for defense capabilities to support the long-term security of Saudi Arabia and the Gulf region “in the face of malign Iranian influence and Iranian related threats,” according to the White House press statement.
Companies like Lockheed Martin (+1.61% to $277.18), General Dynamics (1.10% to 198.03), Raytheon (0.70% to $161.41) and Boeing (1.62% to $183.68) saw shares lift on the news of various other deals with the Saudi government.
Tech companies continued to outperform the market and were amongst the big gainers on the big board. Diversified technology company 3M advanced 1.38% to $198.51. Cisco Systems, software equipment maker, jumped 1.2% to $31.59. Microsoft Corp rose 1.1% to $68.45.
Amongst the laggards were biopharmaceutical, Pfizer down -1.05% to $32.12 and chemicals provider, E.I. DuPont de Nemours & Co posting a 0.57% drop to $77.38.
The Trump engine that could
The S&P 500 posted its third straight gain as analysts say investors continue to shrug off concerns about the Trump Administration and are still buoyed by the strength of earnings reported thus far. In addition, there is expectation of further deals to be announced as President Trump continues his first international trip.
Big gainers were in the distillers and vintners sector as investors take a look at its fundamentals. Brown-Forman Corp, a spirit and wine company saw a 7.54% rise to 56.92 followed by Qorvo a technology and radio frequency solutions provider +3.39% to 78.07.
In other news, Ford named James Hackett, head of its driverless car unit as its 10th CEO thus signalling a shift in strategic direction after firing Mark Fields. Ford touted the move as “the right CEO to lead Ford during this transformative period for the auto industry and the broader mobility space.”
The car maker has fallen 16% over the last year but shares rallied +2.12% to $11.10.
Nasdaq continues to surge and was up 5.05% on its three-month performance. The tech-heavy index closed 0.82% to 6133.62. Autodesk, design software and services company, climbed 3.14% to $113.36. Advanced Micro Devices (-3.2% to $11.04) and TripAdvisor (2.5% to $147.37) were among its biggest decliners.
Oil moved higher to just over $50 a barrel. The Organization of the Petroleum Exporting Countries (OPEC) is to hold its meeting in Vienna on Thursday to determine production cuts.