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 /zigman2/quotes/210598065/realtime DJIA +2.13% ended the day 57.44 points, or 0.2%, higher at 26,827.64.
Boeing Co .’s stock /zigman2/quotes/208579720/composite BA +2.45% 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 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 /zigman2/quotes/210599714/realtime SPX 0.00% , 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 /zigman2/quotes/210598365/realtime COMP +0.94% 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) .
President Donald Trump also pronounced his optimism on the likelihood of a dea l, saying it was coming along great on Monday.
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, saying a new vote “would be repetitive and disorderly.”
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.