Stocks climb to new record highs as U.S.-China trade deal nears

Technology companies led stocks on Wall Street to broad gains Monday, driving the Standard & Poor’s 500 and Nasdaq composite indexes to more record highs.

Financial, communications services and industrial stocks also notched solid gains. Healthcare stocks were the only decliners. Bond prices fell, sending yields higher, and the price of gold fell — signs that investors were favoring higher-risk holdings.

The rally, which added to the market’s gains from last week, came as investors looked ahead to the signing of an initial trade deal with China and the potential for future talks.

The world’s largest economies are expected to sign the “Phase 1” trade agreement Wednesday. It is being viewed as an opening to future negotiations that will deal with more complicated trade issues.

Even a partial deal should remove much of the uncertainty that has weighed on companies and investors, at least until after the U.S. presidential election, said Scott Ladner, chief investment officer for Horizon Investments in Charlotte.

“We don’t think the tariff overhang is going to be very relevant over the next nine months,” Ladner said. “Acting tough with China and imposing tariffs two years before an election is a very different story than doing it … months before an election.”

The S&P 500 index rose 22.78 points, or 0.7%, to 3,288.13. The Nasdaq composite, which is heavily weighted with technology stocks, climbed 95.07 points, or 1%, to 9,273.93. The S&P and Nasdaq previously set new highs on Thursday.

The Dow Jones industrial average ticked up 83.28 points, or 0.3%, to 28,907.05. The Russell 2000 index of smaller-company stocks rose 11.96 points, or 0.7%, to 1,669.61.

Electric car maker Tesla leaped 9.8%, closing above $500 for the first time.

Chipmakers were among the gainers in the technology sector. Nivida climbed 3.1%, and Micron Technology rose 1.4%. The sector is particularly sensitive to developments in trade relations because many of the companies rely on China for sales and supply chains. Apple rose 2.1%.

Industrial and communication services companies also made solid gains. General Electric rose 3.9%. Facebook added 1.8%.

Healthcare stocks slumped, with insurance companies among the sector’s biggest decliners. Cigna fell 3.2%, UnitedHealth Group slid 3.1%, and Anthem dropped 3.6%.

The yield on the 10-year Treasury rose to 1.85% from 1.82%. The pickup in yields helped lift financial stocks, as higher yields make it possible for banks to charge higher interest rates on mortgages and other consumer loans. Goldman Sachs shares rose 1.3%. Citigroup shares gained 1.8%.

Netflix climbed 3% as the streaming video service earned two best picture nominations for the 92nd annual Academy Awards. Martin Scorsese’s “The Irishman” and Noah Baumbach’s “Marriage Story” are both contenders.

Hexcel jumped 9.6% after the company said it is being bought by rival Woodward in a deal that will create one of the largest suppliers in the aerospace and defense industry. Woodward rose 4.8% and would own the majority of the combined company when the deal closes.

Wall Street was also gearing up Monday for a busy opening week of corporate earnings being kicked off by major banks. JPMorgan Chase, Wells Fargo and Citigroup will report fourth-quarter earnings Tuesday, and Bank of America will follow suit Wednesday.

Analysts predict corporate profits slid by 2% during the fourth quarter, which would mark the first time that earnings for S&P 500 companies have fallen four quarters in a row since the period ending in mid-2016, according to FactSet. Companies typically outperform forecasts and temper expectations for sharp declines by the time the bulk of financial reporting is done.

“The management outlooks for this quarter are probably going to be as much, if not more important, than the actual numbers themselves,” Ladner said.

Delta Air Lines will be the first major airline to report financial results Tuesday. The nation’s largest health insurer, UnitedHealth Group, will report earnings Wednesday. Railroad operator CSX will report Thursday.

Wall Street will also have several economic reports to consider this week, including government reports on consumer prices, retail sales and home construction.

Benchmark crude oil fell 96 cents to settle at $58.08 a barrel. Brent crude oil, the international standard, slid 78 cents to close at $64.20 a barrel.

Wholesale gasoline was unchanged at $1.66 a gallon. Heating oil declined 3 cents to $1.90 a gallon. Natural gas fell 2 cents to $2.18 per 1,000 cubic feet.

Gold fell $9.10 to $1,548.40 an ounce. Silver fell 10 cents to $17.93 an ounce. Copper rose 4 cents to $2.86 a pound.