Quantcast
Sunday , September 24 2017
Breaking News
Home / International Markets / U.S. stocks gain 1% for the first time in 3 months as geopolitical fears ebb
U.S. stocks gain 1% for the first time in 3 months as geopolitical fears ebb

U.S. stocks gain 1% for the first time in 3 months as geopolitical fears ebb

WASHINGTON: U.S. stocks gained on Monday with the S&P 500 rising 1% for the first time in three months as the verbal standoff between the U.S. and North Korea cooled for now. The S&P 500 SPX, +1.00%  added 24.52 points, or 1%, to close at 2,465.84. The best performers were technology shares XLK, +1.59% and real-estate stocks. The Dow Jones Industrial Average DJIA, +0.62% rose 135.39 points, or 0.6%, to close at 21,993.71, powered by Visa Inc. V, +1.78%  which rose 1.8%. The Nasdaq Composite Index COMP, +1.34% advanced 83.68 points, or 1.3%, to finish at 6,340.23. Monday’s gains restored the S&P and Nasdaq above their 50-day moving averages, in the latest example of investors using any decline as an opportunity to buy on the dip. “After some short-term knee-jerk reactions last week, the market is having that moment of clarity rally—earnings are marching forward, the economy is strengthening, [and] global economic conditions are gaining steam,” said Karyn Cavanaugh, senior market strategist at Voya Financial.

Last week’s decline was driven in large part by fears over North Korea, where tensions with the U.S. have been escalating. That issue overshadowed the equity market, where earnings have been viewed as strong at a time of high employment and low inflation, as well as valuations that appear elevated by many metrics. The S&P 500 lost 1.4% last week, while the Nasdaq Composite Index gave up 1.5%. “Of course there’s still caution with the geopolitical situation, so while today may be fairly stable, we’re just one headline or tweet away from more volatility. At the same time, the earnings season was tremendously strong, and re-evaluating that and buying on last week’s weakness,” said Peter Andersen, chief investment officer at Fiduciary Trust Co. Secretary of Defense Jim Mattis and Secretary of State Rex Tillerson over the weekend sought to play down the risk of a military conflict, writing in The Wall Street Journal that the Trump administration is seeking diplomatic solutions to achieve the “irreversible denuclearization” of North Korea. President Donald Trump on Monday spoke out against white supremacists, including the Ku Klux Klan, after his initial response to the deadly violence in Charlottesville, Va., was widely criticized as being insufficient. One person was killed and nearly 20 were injured at the rally on Saturday. Analysts said that while market participants were likely following the events, they would have little direct impact on equities. “What happened in Charlottesville isn’t directly relevant to markets, but it is relevant to how deeply divisive the country is in terms of politics, which is something that could become more relevant to markets,” Andersen said.