Stocks jump on Wall Street after US, Canada seal trade deal
Stocks are on track for record highs after the U.S. and Canada agreed to a new trade deal that includes Mexico
NEW YORK (AP) — U.S. manufacturers, basic materials makers and car companies are rising Monday and the S&P 500 is on track for a record high after the U.S. and Canada agreed to a new trade deal that also includes Mexico.
General Electric is surging after it replaced Chairman and CEO John Flannery, who led the company for a little more than a year. Tesla is jumping after company founder Elon Musk agreed to a settlement with regulators that will allow him to remain CEO of the electric car maker.
KEEPING SCORE: The S&P 500 index climbed 18 points, or 0.7 percent, to 2,932 as of 11:30 a.m. Eastern time, above the all-time high it closed at on Sept. 20. The Dow Jones Industrial Average rose 247 points, or 0.9 percent, to 26,705. The Nasdaq composite jumped 40 points, or 0.5 percent, to 8,086.
Mexico's main stock index rose 0.7 percent and while Canada's added 0.2 percent.
The Russell 2000 index of smaller-company stocks fell 5 points, or 0.3 percent, to 1,691 as investors continued to move away from smaller and more U.S.-focused companies. The Russell is down 2.8 since its most recent record close at the end of August.
AFTER NAFTA: The new trade deal, dubbed the United States-Mexico-Canada Agreement, gives U.S. farmers greater access to the Canadian dairy market. But it keeps a NAFTA dispute-resolution process that the U.S. wanted to eliminate and offers Canada protection if the U.S. goes ahead with plans to impose tariffs on cars, trucks and auto parts imported into the United States.
Mexico and the U.S. announced a trade agreement in late August and experts expected Canada would eventually join the pact, as Canada is the U.S.' second-largest trade partner and a deal without Canada would have affected the supply lines of companies in numerous industries.
Dairy producer Dean Foods gained 3.4 percent to $7.34. General Motors jumped 1.1 percent to $34.03 and Ford climbed 1.6 percent to $9.40.
Industrial companies also surged. Honeywell rose 1.1 percent to $166.35 and Boeing advanced 2.3 percent to $380.51. Among materials companies, DowDuPont added 1.1 percent to $65.06
GE CEO O-U-T: General Electric ousted Flannery, who took over from Jeffrey Immelt in 2017 and restructured the conglomerate as it tried to return to its industrial roots. GE stock has tumbled in recent years, and in September, the stock fell to a nine-year low after GE said its marquee gas turbine was flawed, which forced the shutdown of two power plants. On Monday GE said it is taking a $23 billion charge related to its power business and said it will miss its annual profit target.
Flannery will be replaced by H. Lawrence Culp, who was CEO of industrial and medical device company Danaher from 2000 to 2014. GE stock jumped 9.6 percent to $12.38.
ELON'S NOT GONE: Tesla gained 16.2 percent to $307.60 after Musk agreed to give up the chairman's role for at least three years, while Tesla will appoint two new, independent directors to its board. The stock plunged 14 percent Friday, its worst loss in almost five years, after the Securities and Exchange Commission said Musk misled investors in August with a tweet saying he had secured the funding to take Tesla private.
In a court filing, the SEC said it wanted to bar Musk from serving as an officer or director of a publicly traded company and called his actions securities fraud. Musk and Tesla are each paying $20 million to resolve the case.
ENERGY: Benchmark U.S. crude picked up 1.4 percent to $74.24 a barrel in New York and is on track for its highest closing price in almost four years. Brent crude, used to price international oils, added 1.1 percent to $83.62 per barrel in London.
GASES RISING: German conglomerate Linde rose 1.1 percent and industrial gas company Praxair jumped 4.7 percent to $168.36 after Linde said Chinese regulators approved the merger of the two companies. Regulators in the U.S. and Europe have not yet cleared the deal.
LEADERS LEAP: The market's recent leaders continued to rise. That included technology companies, as Apple jumped 1.3 percent to $228.77. Insurer UnitedHealth gained 1.4 percent to $269.79 as health care companies climbed as well. Among retailers, Amazon rose 1.2 percent to $2,026.39.
BONDS: Bond prices fell. The yield on the 10-year Treasury note rose to 3.06 percent from 3.05 percent.
CURRENCIES: The dollar rose to 113.96 yen from 113.58 yen. The euro dipped to $1.1574 from $1.1610. The Canadian dollar fell to 1.2818 from 1.2922.
OVERSEAS: Germany's DAX added 0.7 percent while the CAC 40 in France advanced 0.3 percent. Britain's FTSE 100 fell 0.1 percent. Italy's FTSE MIB lost 0.6 percent as the country's finance minister tried to reassure other European nations about the new government's plan to increase its spending.
Japan's benchmark Nikkei 225 gained 0.5 percent and South Korea's Kospi gave up 0.2 percent. Markets in Hong Kong and the Chinese mainland were closed for National Day holidays.
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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at https://apnews.com/search/marley%20jay