Stocks rise as investors focus on earnings; Boeing drops

Stocks are opening higher on Wall Street Monday as investors get set for a busy week of earnings reports. Specialists Mark Fitzgerald and Lingbo Jiang work at the post that handles Teva and Cardinal Health on the floor of the New York Stock Exchange, Monday, Oct. 21, 2019. Stocks are opening higher on Wall Street Monday as investors get set for a busy week of earnings reports. 

Stocks moved broadly higher on Wall Street Monday as investors watch the latest corporate earnings and developments in the U.S.-China trade war. China’s top negotiator said over the weekend that “substantial progress” was being made in its talks with the U.S., helping to inject more confidence into a market hoping for a trade deal. Investors have been shifting their focus to corporate earnings as tensions in the trade war cool with a recent tariff cease-fire. The broader market has mostly cheered financial results, with earnings season still in the early stages. About 15% of companies in the S&P 500 have reported third-quarter results so far, according to FactSet. Technology companies and banks led the early rally.

Chipmakers, many of which are highly reliant on China for business, made some of the strongest gains. Nvidia rose 1.8% and Micron rose 1.7%. Banks benefited from a solid rise in bond yields. Citigroup rose 2.2%. The yield on the 10-year Treasury rose to 1.78% from 1.75% late Friday. Higher yields allow banks to charge more lucrative interest on mortgages and other loans. Higher yields are also a sign that investors are more confident. Utilities and real estate companies lagged the market as investors shifted their money from safe-play sectors toward holdings with more growth potential.

KEEPING SCORE: The S&P 500 index rose 0.4% as of 9:55 a.m. Eastern time. The Dow Jones Industrial Average rose 10 points to 26,819 and was weighed down by a sharp drop in Boeing shares. The Nasdaq rose 0.6%. The Russell 2000 index of smaller stocks did much better than other indices in yet another sign of investors’ confidence. The index rose 1.1%. OVERSEAS: European markets moved broadly higher. The European Union is considering Britain’s request for an extension on its pending Oct. 31 exit from the trading bloc. Lawmakers in Britain voted for the delay, though Prime Minister Boris Johnson is still pushing for a vote on the latest proposal over trade and other issues that would allow the nation to leave the European Union on Oct. 31.

Stocks in Asia also rose. EARNINGS AHEAD: Monday marks a relatively quiet start to a week full of key corporate earnings. McDonald’s, the world’s biggest burger chain, will report its latest results on Tuesday along with shipping bellwether United Parcel Service. Investors will be closely watching Boeing’s quarterly report on Wednesday for a better picture of the financial impact from its 737 Max jet groundings. Caterpillar, a key industrial company, will also report its results on Wednesday. Southwest Airlines and American Airlines, along with retail powerhouse Amazon, will report results on Thursday.

TURBULENT STOCK: Boeing fell 4%. Congress is ramping up its scrutiny of Boeing as its CEO, Dennis Muilenburg, is scheduled to testify to the House’s transportation committee on Oct. 30. Investors are concerned about the latest revelations surrounding its 737 Max airplanes. In messages released last week, former senior Boeing test pilot Mark Forkner told a co-worker in 2016 he unknowingly misled safety regulators about problems with a flight-control system that would later be implicated in two deadly crashes. On Sunday, the company said that it’s unfortunate that messages between co-workers weren’t released in a manner allowing for “meaningful explanation.”

OPIOID SETTLEMENT: The nation’s three largest drug distributors and a drugmaker have reached a tentative deal to settle a lawsuit related to the nation’s opioid crisis. The agreement comes within hours of the first federal trial over the crisis, with opening statements scheduled for Monday in Cleveland. However, the settlement does not resolve more than 2,600 other lawsuits across the country seeking to hold the drug industry accountable for the opioid crisis. AmerisourceBergen slid 4.1%, Cardinal Health shed 3.7% and McKesson fell 3.2%. Drug manufacturer Teva rose 2.4%.