Tech stocks swoop in with higher indexes after five straight declines

Technology stocks led Wall Street's main indexes higher on Monday after five straight sessions of declines, but a fall in the shares of the world's largest planemaker after a fatal crash in Ethiopia limited gains on the blue-chip Dow.

Boeing Co, the best performing Dow component this year by a wide margin, slumped 7.4 per cent after many airlines grounded the company's new 737 MAX 8 passenger jet after a second deadly crash in just five months. Helping markets march higher was the heavyweight Dow component's shares bouncing off its session lows, while the industrial sector reversed early losses to rise 0.31 per cent.

"The initial shock about Boeing's problems caused it's stock to really sell-off and they have extensive issues to fix, but in the long run it's probably not as bad for the business as the initial sell-off suggested," said Elliott Savage, portfolio manager of the YCG Enhanced fund in Austin, Texas. Recent economic data showed U.S. retail sales rose unexpectedly in January, welcome news for the economy after a raft of weak December data, as well as a sharp moderation in the pace of job growth in February.

The S&P 500 fell 2.2 per cent last week, its biggest decline since 2018-end, as the tepid U.S. jobs growth report added to fears of a slowing global economy. Still, the benchmark index is now about 6 per cent away from its record high hit on Sept. 20.

All the major S&P sectors were trading higher, led by gains in the technology sector, which was up 2.01 per cent. Apple Inc rose 3.3 per cent and was the biggest boost to the all three indexes after Bank of America Merrill Lynch upgraded the iPhone maker's shares to "buy".

Chipmaker Nvidia Corp jumped about 7 per cent after entering a $6.8 billion deal to buy Mellanox Technologies Ltd. The Israeli chip designer rose 8.3 per cent. "The M&A news from Nvidia shows corporations are seeing value in other businesses and acquiring them sends the signal that there is some value in tech stocks," Savage said.

At 12:52 p.m. ET the Dow Jones Industrial Average was up 71.02 points, or 0.28 per cent, at 25,521.26. The S&P 500 was up 31.62 points, or 1.15 per cent, at 2,774.69 and the Nasdaq Composite was up 128.36 points, or 1.73 per cent, at 7,536.50. At least six S&P sectors rose more than 1 per cent, while the defensive utilities and consumer staples sectors posted the slimmest gains.

In other news, President Donald Trump told Congress to slash funding for foreign aid and the State Department and increase spending for the military and the wall he wants to build on the U.S.-Mexico border in his 2020 budget, the opening move in his next funding fight with Congress. Defence companies General Dynamics Corp, United Technologies Corp and Textron Inc rose 1 per cent on the news.

Advancing issues outnumbered decliners for a 3.50-to-1 ratio on the NYSE and a 3.04-to-1 ratio on the Nasdaq. The S&P index recorded 22 new 52-week highs and two new lows, while the Nasdaq recorded 47 new highs and 28 new lows. 

(With inputs from agencies.)