By Stephen Culp
(Reuters) – A broad rally boosted the S & P 500 and Nasdaq to new heights at closing for the second consecutive session on Monday with a trade agreement reached between the United States and Mexico, which improved investor confidence.
The industrial average of the Dow Jones rose by 1.01 percent to 26.050 points, while the S & P 500 gained 0.767039 percent at 2.897 points. The Nasdaq technology index rose by 0.91 percent to 8,018 points.
Technology stocks pushed the Nasdaq for the first time above 8000 points and the industry provided the biggest boost for the S & P 500.
A senior US trade official announced an agreement with Mexico to replace the North American Free Trade Agreement (NAFTA) and said the talks with Canada should begin immediately.
The best business prospect received additional news support that prompted the European Union to accelerate tariff negotiations.
Disputes between the United States and its trading partners have put investor confidence under pressure for much of this year, despite solid economic fundamentals and two robust quarters of operating results.
"It takes a long time for people to come out of their daily worries about thousands of points and feel a little more comfortable," said Robert Pavlik, Chief Investment Strategist at SlateStone Wealth LLC.
"People feel a bit more positive", Pavlik added.
Matt Blunt, chairman of the Automotive Policy Council of America, said he was optimistic about the trade agreement. Ford Motor Co. shares rose 3.2 percent while General Motors posted 4.8 percent higher.
Tariff-sensitive carriers such as Boeing Co and Caterpillar Inc gained 1.2 percent and 2.8 percent respectively, leading to the industry's lead and the Dow ahead.
Copyright Thomson Reuters 2018