U.S. Stocks Move Notably Higher Amid Continued Positive Sentiment

(RTTNews) - Stocks showed a strong move to the upside during trading on Monday, adding to the gains posted last week. With the continued upward move, the major averages all ended the session at new record closing highs.

The Dow underperformed its counterparts but still closed up 100.51 points or 0.4 percent at 28,235.89. The tech-heavy Nasdaq jumped 79.35 points or 0.9 percent to 8,814.23 and the S&P 500 climbed 22.65 points or 0.7 percent to 3,191.45.

The strength on Wall Street reflected continued positive sentiment after the U.S. and China finally reached an agreement on a phase one trade deal last week.

The agreement, announced by U.S. and Chinese officials last Friday, includes suspending planned tariffs on Chinese goods as well as scaling back existing tariffs in exchange for Chinese structural reforms and purchases of U.S. goods.

The trade deal eliminates a lot of the uncertainty hanging over the markets, although traders still seem somewhat wary as they await more details about the agreement.

Additionally, the agreement does not completely end the U.S.-China trade war, as some tariffs will remain in place as negotiators begin phase two talks.

A report from the National Association of Homebuilder showing a substantial improvement in homebuilder confidence added to the positive sentiment on Wall Street.

The report said the NAHB/Wells Fargo Housing Market Index spiked to 76 in December from an upwardly revised 71 in November.

Economists had expected the index to come in unchanged compared to the 70 originally reported for the previous month.

With the unexpected jump, the housing market index reached its highest level since hitting 77 in June of 1999.

Before the start of trading, the New York Federal Reserve released a separate report showing New York manufacturing activity has grown at a slightly faster rate in the month of December.

A notable drop by shares of Boeing (BA) limited the upside for the Dow, with the aerospace giant slumping by 4.3 percent amid reports the company may further cut or suspend production of the troubled 737 Max airplane.

Sector News

Natural gas stocks moved sharply higher over the course of the trading session, driving the NYSE Arca Natural Gas Index up by 3.2 percent to its best closing level in over a month.

The rally by natural gas stock came amid a notable increase by the price of the commodity, as natural gas for January delivery surged up $0.045 or 2 percent to $2.341 per million BTUs.

Significant strength was also visible among tobacco stocks, as reflected by the 1.9 percent jump by the NYSE Arca Tobacco Index.

British American Tobacco (BTI) posted a standout gain after Bank of America upgraded its rating on the tobacco producer to Buy from Underperform.

Oil, computer hardware and biotechnology stocks also saw considerable strength on the day, while gold stocks moved to the downside amid a modest decrease by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index slipped by 0.3 percent, while China's Shanghai Composite Index climbed by 0.6 percent.

Meanwhile, the major European markets all showed strong moves to the upside on the day. While the U.K.'s FTSE 100 Index spiked by 2.3 percent, the French CAC 40 Index jumped by 1.2 percent and the German DAX Index advanced by 0.9 percent.

In the bond market, treasuries showed a notable pullback following the significant rebound seen last Friday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 7.3 basis points to 1.892 percent.

Looking Ahead

Trading on Tuesday may be impacted by reaction to U.S. economic reports on housing starts and industrial production.