Technology Sectors Lead; Stock Is At High Despite Corporate News Deluge
U.S. stocks kicked off the week on the right foot, trading higher on Monday after a slew of corporate news. Here is a more in-depth attack on the latter.
The Dow Jones industrial average rose more than 100 points shortly after the open before holding about 85 points higher, with 3M andBoeing contributing the most gains. The S&P 500 rose half a percent, with information technology leading advancers. The Nasdaq composite outperformed, gaining nearly 0.75 percent.
AT&T reached a deal to buy Time Warner on Saturday for more than $85 billion, or $107.50 per share. The combination brings Time Warner full circle back to the heady days of the first Dotcom bubble, when it created a merger of equals with AOL- which failed spectacularly in achieving its goals and resulted in an eventual breakup.
TD Ameritrade also announced it's buying Scottrade for $4 billion in a two-step deal with TD Bank. TD Ameritrade said said it would end up paying $2.7 billion for Scottrade's brokerage business after the sale of Scottrade Bank to Toronto-Dominion Bank's U.S. banking unit for $1.3 billion.
Meanwhile, airplane interior maker B/E Aerospace saw its stock surge about 15 percent in midmorning trade after announcing it's being bought out by Rockwell Collins for $6.4 billion.
Earnings season continued with T-Mobile, VF Corp, Restaurant Brandsand Kimberly-Clark all reporting quarterly results before the bell. Visaand Zions Bancorp are among the firms scheduled to post results after the bell after the close. This week will be the busiest one of the season, with more than 160 S&P companies and 13 Dow components scheduled to report.
The economic data calendar was light on Monday, with only the IHS Markit manufacturing index's flash read for October released. The number rose to 53.2 from a three-month low of 51.5, which was hit in September.
That said, several Federal Reserve officials are scheduled to speak Monday, including Chicago Fed President Charles Evans and Fed Governor Jerome Powell.
James Bullard, the St. Louis Fed president, said in a speech Monday morning that low interest rates are likely to be the norm over the next 2-to-3 years, as the U.S. is under a low-productivity growth regime.
In oil markets, U.S. crude fell 1.3 percent to $50.17 per barrel after Iran said it wanted to be exempt from an OPEC deal which would cut production. Crude prices have rallied recently on expectations that OPEC would strike a deal to cut worldwide output.
U.S. Treasurys traded lower, with the two-year note yield at 0.844 percent and the benchmark 10-year yield around 1.768 percent. The U.S. dollar held flat to higher against a basket of currencies, with the euro near $1.088 and the yen around 104.3. The Chinese yuan, meanwhile, traded near six-year lows against the U.S. currency.
Overseas, European equities traded mostly higher after better-than-expected data, while political uncertainty in Spain dissipated. The pan-European Stoxx 600 index rose 0.13 percent, while Spain's Ibex 35 gained more than 1.3 percent. In Asia, stocks closed mostly higher, with the Japanese Nikkei 225 rising 0.29 percent and the Shanghai composite gaining 1.21 percent.
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