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S&P 500 posts third consecutive day of gains

U.S. stocks rose as a gauge of demand for certain capital goods suggested that business investment remains strong. Shares of Boeing fluctuated after President Donald Trump said he was issuing an executive order grounding all Boeing 737 Max jets in the wake of Sunday’s deadly crash.

The S&P 500 (^GSPC) rose 0.69%, or 19.4 points, to 2,810.92 as of market close. The index rose to as high as 2,821.24 during the session, or the highest level since October 10.

The Dow (^DJI) rose 0.58%, or 148.23 points, while the Nasdaq (^IXIC) rose 0.69%, or 52.37 points. The Nasdaq’s intraday high of 7,677.07 was the highest level since October 17.

Despite a pullback last week – with each of the three major indices posting weekly losses of more than 2% – U.S. stocks still appear to have room to run, Terry Sandven, U.S. Bank Wealth Management chief equity strategist, wrote in a note.

“Lack of excesses or ‘bubbles’ in inflation, valuation or investor euphoria are among indicators pointing toward still more upside,” he said.

But uncertainty over the terms of a U.S.-China trade deal has continued to leave market participants jittery. U.S. Trade Representative Robert Lighthizer, testifying before the Senate Finance Committee on Tuesday, declined to provide a concrete timeline for the end of the trade talks but said the administration’s “hope is that we are in the final weeks” of discussions. He also suggested that the U.S. would keep the option of tariffs on the table in the event of violations of an eventual agreement.

Boeing update

Boeing (BA) shares opened slightly higher on Wednesday and ended the session up 0.46% to $377.14 each as of market close. However, the stock traded choppily Wednesday and dipped into the red after President Donald Trump said he was issuing an executive order grounding all Boeing 737 Max jets. This followed Canada’s move earlier in the day to issue a safety notice restricting commercial use of the plane.

Boeing’s stock has declined a total of about 10.7% so far this week.

The FAA, which previously stood behind its airworthiness directive for the 737 Max 8, said in a statement Wednesday that it was “ordering the temporary grounding of Boeing 737 Max aircraft operated by U.S. airlines or in U.S. territory.”

“The agency made this decision as a result of the data gathering process and new evidence collected at the site and analyzed today. This evidence, together with newly refined satellite data available to FAA this morning, led to this decision,” the FAA said in the statement. “The grounding will remain in effect pending further investigation, including examination of information from the aircraft’s flight data recorders and cockpit voice recorders.”

By Wednesday, more than 40 countries had banned flights involving the Boeing 737 Max 8 aircraft following the deadly crash of Ethiopian Flight 302.

Boeing released a statement Wednesday saying that it “continues to have full confidence in the safety of the 737 Max.” However, it “has determined – out of an abundance of caution and in order to reassure the flying public of the aircraft’s safety – to recommend to the FAA the temporary suspension of operations of the entire global fleet of 371 737 Max aircraft.”

The CEO for Norwegian Airlines – one of the airlines that has grounded flights – said in a video posted to Twitter Wednesday morning that the company “will not take the cost related to the new aircraft that we have to park temporarily.”

“We will send this bill to those who produce this aircraft,” CEO Bjorn Kjos said in the video.

Economy

Durable goods orders unexpectedly rose in January, marking the third straight month of increases in orders, the Commerce Department said in its advance report Wednesday. New orders rose 0.4% for the month, whereas consensus economists anticipated orders to fall by the same amount. Increases for orders in December were upwardly revised to 1.3%, from 1.2%. However, when excluding transportation, new orders decreased 0.1%, short the 0.1% increase anticipated.

Orders for capital goods excluding aircraft, a proxy for underlying business investment, rose a solid 0.8% in January, higher than the 0.2% increase expected. Orders in this category fell an upwardly revised 0.9% in December.

A gauge of prices businesses receive for goods and services rose less-than-expected in February, the Labor Department reported Wednesday. The producer price index edged up 0.1% month-over-month in February, below the 0.2% increase expected. In January, PPI for final demand fell 0.1%. The PPI index for February excluding food, energy and trade services also rose 0.1% month-over-month, below the 0.2% expected and the 0.3% reading from January. Year-over-year, PPI rose 1.9%, in-line with expectations.

“The rebound in underlying capital goods orders in January is still consistent with a slowdown in business equipment investment growth in the first quarter, although it suggests that slowdown will not be as sharp as signaled by some of the incoming survey evidence,” Michael Pearce, senior U.S. economist with Capital Economics, wrote in a note. “With the February producer price figures showing few signs of a pick-up in inflation in the pipeline, there is still a strong case for the Fed to remain patient.”

Britain's Prime Minister Theresa May leaves from Downing Street in London, Wednesday, March 13, 2019. European Union officials on Wednesday criticized the U.K. Parliament for rejecting a Brexit deal for a second time as the bloc prepared for a chaotic, cliff-edge departure. (AP Photo/Matt Dunham)

Brexit

Elsewhere, the UK Parliament voted Wednesday to reject a plan that would see the UK leave the EU without a deal in place. This came a day after Prime Minister Theresa May failed to win over MPs Tuesday with her revised Brexit deal. May, however, emphasized after the vote Wednesday that “the default, in the UK and the EU, remains that the UK will leave without a deal unless something else is agreed.”

Lawmakers are now set for a vote Thursday on whether to delay the deadline for Brexit beyond the original March 29 deadline.

The British pound rose against the dollar (GBPUSD=X) to more than $1.33. The UK’s FTSE 100 index (^FTSE) hugged the flatline for much of Wednesday’s session.

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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