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MARKET SNAPSHOT: Stocks Close Higher; Dow's Ascent Clipped By Boeing's Slump

By Mark DeCambre, MarketWatch , Sunny Oh

Boeing shares suffer third straight decline

U.S. stock benchmarks closed higher Monday, amid optimism over tariff talks and better-than-expected corporate earnings, but a decline in shares of Boeing capped gains for the blue-chip Dow Jones Industrial Average.

How did the major indexes perform?

The Dow ended the day 57.44 points, or 0.2%, higher at 26,827.64.

Boeing Co.'s stock (BA) extended its decline to a two-month low, down 3.8%, following a report on Friday that said the company may have misled federal aviation authorities (link) about the safety of the 737 Max jet. The drop produced a roughly 70-point drag on the blue-chip Dow. The aviation and defense contractor has traded down three straight sessions.

The S&P 500 index , meanwhile, advanced 20.52 points, or 0.7%, to end at 3,006.72, leaving it 0.6% away from its record closing high of 3,025.86 set on July 26. The Nasdaq Composite Index climbed 73.44 points, or 0.9%, to finish at 8,162.99.

What drove the market?

China's Vice Premier Liu He said Washington and Beijing have laid the groundwork for success in the first phase of its attempt to carve out a resolution to its trade disagreement. "China and the U.S. have made substantial progress in many aspects, and laid an important foundation for a phase one agreement," said China's top trade negotiator at a technology conference in Nanchang, Jiangxi, on Saturday, Bloomberg News reported (paywall) (link).

President Donald Trump also pronounced his optimism on the likelihood of a deal, saying it was coming along great on Monday. (link)

Meanwhile, U.K. British Prime Minister Boris Johnson was forced to ask the European Union for a three-month extension to the Oct. 31 deadline to exit from the trade bloc, representing the latest setback for the British leader and the country's yearslong attempt to forge an orderly separation. The Germany's economic affairs minister said he thought the EU would approve the extension request.

Johnson is seeking another vote on his Brexit proposal in Parliament on Monday, but U.K. House of Commons Speaker John Bercow rejected his bid (link), saying a new vote "would be repetitive and disorderly."

Read:What the latest Brexit setback means for markets (link)

Markets have been focused on the threat of Britain crashing out of the EU without a trade agreement, which some fear could disrupt global markets.

In corporate earnings, of the roughly 75 S&P 500 companies that have so far reported earnings, 82.7% topped expectations, while only 12% have disappointed Wall Street, according to Refinitiv. By comparison, the long-term average of outperformance since 1994 is 65% and 20% for cooler-than-expected results.

This week sees 130 S&P 500 companies, or a quarter of the index, expected to report quarterly earnings, and will be the busiest week for earnings reports this quarter.

"Equities are looking more positively at U.S.-Chinese talks and the potential of a better than expected earnings season showing from major names this week," wrote Arnim Holzer, macro strategist for EAB Investment Group.

Which stocks were in focus?

Shares of Halliburton Co.(HAL)rose 6.4% on Monday (link), after the oil-services company reported a third-quarter profit that was in line with expectations but revenue that fell below, amid lower pressure pumping activity and reduced drilling and wireline activity.

Shares of McDermott International Inc.(MDR) fell 13.2% (link)after the company announced an agreement on $1.7 billion in new financing. This comes amid reports that McDermott was in talks to restructure its balance sheet.

Teva Pharmaceutical Industries Ltd's U.S.-listed stock (TEVA.TV) climbed 8.7% after several drug companies (link) reached a settlement with two Ohio counties in opioid lawsuits

Apple Inc.'s shares(AAPL)were up after an analyst at Raymond James (link)raised its target price for the iPhone manufacturer to $280 a share, from $250. The stock rose 1.7% Monday.

Shares of Coty Inc. (COTY) rallied 13.4% after the beauty company said it would explore (link) strategic alternatives for its professional beauty business.

How did other markets perform?

The 10-year Treasury note yield gained 4.7 basis points (link) to trade at 1.794%, a four-week high.

West Texas Intermediate crude for November delivery was under pressure (link), shedding 47 cents, or 0.9%, to settle at $53.31 a barrel on the New York Mercantile Exchange.

Gold for December delivery on Comex fell $6 or 0.4% to settle at $1,488.10 an ounce (link).

The ICE U.S. Dollar Index , which tracks the performance of the greenback against six major rivals, rose about 0.1% to 97.339.

Global stock-markets were also trading higher at the start of the week. The Stoxx Europe 600 closed up 0.6% to 394.22. In Asia, Japan's Topix index gained 0.4% and China's CSI 300 index finished up 0.3%.

 

(END) Dow Jones Newswires

October 21, 2019 16:18 ET (20:18 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.