Technology and industrial stocks lead US stock market

U.S. stocks advanced on Monday, led by gains in shares of technology and industrial companies, as a last-minute deal to save NAFTA as a trilateral pact raised hopes for progress in talks with other countries at the start of the fourth quarter.

The relief lifted world markets after the new United States-Mexico-Canada Agreement (USMCA) rescued a $1.2 trillion open-trade zone on Sunday.

U.S. President Donald Trump coerced Canada and Mexico into accepting more restrictive commerce with their main export partner in a deal that will make it harder for global automakers to build cars cheaply in Mexico and aims to bring more jobs to the United States.

Shares of U.S. carmakers advanced with Ford rising 1.6 per cent and General Motors 1.5 per cent.

Trade-sensitive stocks, Boeing and Caterpillar, rose 1.5 per cent and 0.6 per cent, respectively.

"Anything positive relating to trade has always buoyed the markets so it's not surprising to see a bounce," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin.

Market reaction to these developments are relatively short-lived, but the economics in the market is very strong and only concerns about the trade issues have been holding it back from moving higher, Frederick added.

Among the biggest boosts to the S&P 500 was General Electric shares, which soared 12.2 per cent after Chief Executive Officer John Flannery stepped down and the company announced a $23 billion charge related to its power business.

At 9:48 a.m. EDT the Dow Jones Industrial Average was up 211.75 points, or 0.80 per cent, at 26,670.06, the S&P 500 was up 19.35 points, or 0.66 per cent, at 2,933.33 and the Nasdaq Composite was up 60.28 points, or 0.75 per cent, at 8,106.64.

Nine of the 11 major S&P sectors were trading higher, led by a 1.2 per cent rise in the industrials group.

The so-called FAANG stocks — Facebook, Amazon, Apple, Netflix and Alphabet — rose between 0.3 per cent to 2.3 per cent and boosted the technology group.

Tesla shares soared 15.0 per cent before the bell after Elon Musk agreed to step down as the company's chairman but remain as chief executive in a settlement with the U.S. Securities and Exchange Commission on Saturday.

This weekends with the Labor Department's non-farm payrolls report and focus may also shift towards the start of the financial reporting season later this month.

Bolstered by a growing economy, deep corporate tax cuts and increased stock buybacks, S&P 500 companies are expected to post 21.6 per cent increase in earning per share from a year earlier, according to Thomson Reuters I/B/E/S.

ISM's data on national factory activity index in September and the U.S. Commerce Department's construction spending data for August is due at 10:00 a.m. ET.

Advancing issues outnumbered decliners by a 2.52-to-1 ratio on the NYSE and by a 1.96-to-1 ratio on the Nasdaq.

The S&P index recorded 29 new 52-week highs and two new lows, while the Nasdaq recorded 64 new highs and 22 new lows.