(Reuters) – A wide rally strengthened the S & P 500 and Nasdaq to new heights at the close of the second consecutive session on Monday, trade agreement between the United States and Mexico improve investor confidence.
The industrial average of the Dow Jones rose by 1.01 percent to 26,050 points, while the S & P 500 gained 0.77 percent at 2,897 points. The Nasdaq technology index increased by 0.91% 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%, while General Motors increased 4.8%.
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.