Stocks - Dow Closes Higher as Tech Stocks Reign Supreme
Investing.com – The Dow rose on Monday as surging tech stocks offset declining healthcare stocks.
The Dow Jones Industrial Average rose 0.70%, the S&P 500 added 0.68%, while the Nasdaq Composite gained 1.15%.
Tech stocks reigned supreme, pushing the broader market higher, as FAANG stocks found favor, led by Netflix (NASDAQ:NFLX).
Netflix rose 3% on a JPMorgan report that suggested the streaming giant could be a potential acquisition target for Apple.
“We think Netflix is best strategic fit on a leading position in engagement level as well as original content, differentiating itself from pure aggregators of content,” JPMorgan said. But Netflix would probably command a significant premium of as much as $189 billion, the bank speculated. Netflix has a current market value of $148.4 billion plus $7 billion in net debt.
Facebook (NASDAQ:FB), Amazon.com (NASDAQ:AMZN), Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL) ended the day higher.
Alphabet fell in after-market trading as the tech giant reported fourth-quarter revenue and earnings that topped expectations.
The gains in tech stocks offset weakness in healthcare following a slump in Allergan.
Allergan (NYSE:AGN) slumped 4% after the Federal Drug Administration approved Evolus' cheaper version of the company’s wrinkle-treatment Botox.
Evolus (NASDAQ:EOLS) said its low-cost wrinkle-treatment, Jeuveau, is expected to be available throughout the US starting in spring 2019. Its shares surged nearly 12%.
Consumer staples also kept the broader market afloat, thanks to strong quarterly results from Clorox and Sysco.
Clorox (NYSE:CLX), maker of popular household cleaning products, rose 6%, and food distributor company Sysco (NYSE:SYY), rose 5% as both delivered an earnings beat on the bottom line.
Energy stocks, meanwhile, clawed back some losses to end the day roughly flat even as U.S. oil prices ended the day 1.3% lower.
The bright start to the week for stocks comes as investors sense the U.S.-China trade dispute is unlikely to turn sour, when the trade truce expires on the March 1, following recent progress on talks between the two nations.
"While we don’t yet have a comprehensive deal, recent reported progress in trade talks and the potential for another meeting between the US and Chinese presidents in the coming weeks are encouraging, and we believe that the chances of escalation beyond March 1 have reduced," Morgan Stanley said in a note.
In an interview with CBS's Face the Nation on Sunday, President Donald Trump said talks with Beijing are "doing very well" and there is a "good chance" of a deal over tariffs.
In corporate news, Pizza delivery company Papa John's (NASDAQ:PZZA) surged about 9% after it received a $200 million investment, with an option for an additional $50 million by March 29, from Starboard Value through a new securities purchase agreement.
Top S&P 500 Gainers and Losers Today:
Clorox (NYSE:CLX), Raytheon (NYSE:RTN) and Sysco (NYSE:SYY) were among the day's top S&P 500 gainers for the session.
ABIOMED (NASDAQ:ABMD), Allergan (NYSE:AGN) and AbbVie (NYSE:ABBV) were among the worst S&P 500 performers of the day.
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