Wall Street starts off the fourth quarter on healthy note

Wall Street started off the fourth quarter on a healthy note on Monday, led by automotive and railroad stocks, after a last-minute deal to salvage NAFTA as a trilateral pact.

Canada and Mexico accepted more restrictive commerce in the new United States-Mexico-Canada Agreement (USMCA), which 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 Ford jumped 1.7 per cent, while General Motors gained 1.3 per cent. The gainers also included auto part makers, with Lear Corp up 2.8 per cent. Among railroads, Kansas City Southern rose 2.5 per cent.

Gains in the stocks led to a 1 per cent rise in the industrial sector, setting them on track for their best day in five weeks.

The biggest driver to the index was General Electric, which rose 9.7 per cent and was set for its best day in three-and-a-half years after replacing Chief Executive John Flannery with board member Larry Culp, who, investors bet, could transform the company's portfolio more quickly.

Seven of the 11 major S&P sectors were higher, with gains of more than 1 per cent in the materials and energy indexes. Energy stocks got a boost as crude oil prices hovered near 2014 highs, also boosted by the NAFTA deal.

The heavyweight technology and health sectors were up between 0.94 per cent and 0.75 per cent.

"It's relatively broad-based rather than certain stocks... you've had this trade stuff hanging over the markets for a while, so any good news is positive," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

At 12:43 a.m. EDT the Dow Jones Industrial Average was up 200.12 points, or 0.76 per cent, at 26,658.43, the S&P 500 was up 14.06 points, or 0.48 per cent, at 2,928.04 and the Nasdaq Composite was up 19.48 points, or 0.24 per cent, at 8,065.83.

Twenty-seven of the 30 stocks on the blue-chip Dow were trading higher. The S&P was on track for its best one-day gain in past six days, although the index was trading near its session lows.

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, said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin.

The defensive real estate and utility sectors led the decliners. The communications services index also fell 0.32 per cent as media stocks lagged.

Tesla shares soared 15.3 per cent as signs it had met targets for quarterly production numbers added to relief at Chief Executive Elon Musk's settling a lawsuit with regulators that could have forced him out.

Among decliners, Intel slipped 1.6 per cent after Barclays downgraded the chipmaker's stock, saying it would face a costly battle to keep market share as its end-markets slowed.

Declining issues outnumbered advancers for a 1.04-to-1 ratio on the NYSE and a 1.24-to-1 ratio on the Nasdaq.

The S&P index recorded 43 new 52-week highs and five new lows, while the Nasdaq recorded 88 new highs and 45 new lows.

(With inputs from agencies.)