Monday March 11th

11-03-2019

Nasdaq rises 1% as Apple and Facebook climb, Boeing pressures Dow

The S&P 500 and Nasdaq Composite opened higher on Monday as they got a boost from tech shares like Apple and Facebook. The S&P 500 gained 0.6 percent as the tech sector climbed more than 1 percent. The Nasdaq Composite rose 1 percent. Apple shares rose more than 2.5 percent after Bank of America Merrill Lynch upgraded the stock to buy from neutral, noting the company's recent pullback presents "opportunity." The bank also raised its 12-month price target to $210 per share from $180. Facebook also gained more than 2 percent after Nomura Instinet upgraded it to buy from neutral. In a note to clients, analyst Mark Kelley said consumers are transitioning to Facebook's Stories format and its increased focus on messaging. Kelley also hiked his price target to $215 per share from $172. The Dow Jones Industrial Average was under pressure, however, as shares of Boeing dragged down the 30-stock index. Boeing fell more than 9 percent after a flight crash on Sunday that involved the 737 MAX 8 jet. This is the second crash in less than six months involving that model. Boeing's decline shaved off more than 300 points from the Dowgiven the index's price-weighted nature and the stock's high price relative to other Dow components. In other words, the Dow would be positive along with the S&P 500 and Nasdaq if not for Boeing's decline. Monday's moves come after the major indexes posted their worst weekly performances of 2019 amid growing concerns of a possible economic slowdown around the world. "The most recent economic data fits with our 2019 outlook that suggests economic growth is likely to slow this year but recession prospects remain very low," said Bruce Bittles, chief investment strategist at Baird, in a note. "This reinforces the view that the Federal Reserve will continue with patience with regards to any future rate hikes until such time that underlying economic fundamentals show significant improvement." "As a result, the current weakness in the equity markets should be viewed within the confines of a consolidation phase," he said. Data on Friday showed the world's largest economy added just 20,000 jobs in February versus an expected gain of 180,000 — marking the weakest month of jobs creation since September 2017. Meanwhile, data out of China last week showed its exports slumped 20.7 percent from a year earlier, far below analysts' expectations and wiping out a surprise jump in January. These figures all came less than 24 hours after the European Central Bank slashed its growth forecasts for the euro zone and announced a new round of policy stimulus. On Sunday, Fed Chair Powell told "60 Minutes" that he thinks the U.S. economy is still strong, though he acknowledged that weakness around the world could start to hit the U.S. "I would say there's no reason why this economy cannot continue to expand." Asia Pacific markets traded mixed on Monday as investors remained cautious over a possible global economic slowdown after important data in the United States and China missed expectations last week. Chinese mainland shares traded up: The Shanghai composite gained 1.92 percent to 3,026.99 while the Shenzhen composite was up 3.89 percent at 1,667.81. Japan's Nikkei 225 see-sawed between gains and losses to finish up 0.47 percent at 21,125.09 while the Topix index added 0.57 percent to 1,581.44. In South Korea, the Kospi was near flat at 2,138.10 while major indexes in Singapore and Malaysia struggled for gains in afternoon trade. Hong Kong's Hang Seng index traded up 0.93 percent. Oil prices rose on Monday, lifted by comments from Saudi oil minister Khalid al-Falih that an end to OPEC-led supply cuts was unlikely before June and a report showing a fall U.S. drilling activity. U.S. West Texas Intermediate (WTI) crude oil futures were at $56.81 per barrel, up 74 cents, or 1.3 percent from their last close. Brent crude futures were at $66.61 per barrel, up 87 cents, or 1.3 percent. Gold slipped on Monday after failing to break decisively above resistance at $1,300 per ounce in the previous session, as equity markets regained some ground and the dollar steadied near a three-month peak. Spot gold was down 0.2 percent at $1,295.81 per ounce at 1311 GMT, while U.S. gold futures slipped 0.3 percent to $1,295.20. Spot prices hit $1,300.61 on Friday, but quickly slipped back below $1,300 an ounce.