Closing Market Summary: New Records as Government Shutdown Comes to an EndStocks shot to new records on Monday, helped by a Senate vote to reopen the government and provide funding through February 8.
The Nasdaq Composite jumped 1.0% to 7408.03, the S&P 500 climbed 0.8% to 2832.97, the Dow Jones Industrial Average rose 0.3% to 26140.97, and the Russell 2000 advanced 0.5% to 1605.17. All four stock indices closed at fresh records and finished at their best marks of the day.
The federal government closed nonessential operations at midnight on Friday after the Senate failed to reach an agreement on a short-term funding measure, mainly due to differences over immigration. Although Republicans hold a slim majority in the Senate (51 to 49), they needed some Democratic support to reach the required 60-vote threshold.
Republican leadership managed to secure Democratic support on Monday, passing a short-term funding measure 81-18, by promising to consider immigration legislation in early February. More specifically, Democrats are looking for Republicans to address the fate of the so-called "Dreamers"--immigrants who were illegally brought to the U.S. as children.
The funding bill is expected to pass in the House of Representatives on Monday evening. President Trump is then expected to sign the bill into law, which would officially bring the shutdown to an end.
On Wall Street, advancing stocks outnumbered declining stocks 1.8 to 1 with nine of eleven sectors finishing in the green. The energy and telecom services sectors were the top performers, adding 2.1% and 2.3%, respectively, while the consumer discretionary (+1.1%) and real estate (+1.0%) groups also had a relatively strong showing.
Within the energy space, Halliburton (HAL 56.40, +3.39) jumped 6.4% after reporting better-than-expected earnings and revenues for the fourth quarter. News that OPEC and other producers would continue to cooperate on production beyond 2018 helped energy shares, as did updated economic growth projections from the International Monetary Fund; the IMF projects that the U.S. economy will grow 2.7% in 2018 (up from 2.1%) and that the world economy will grow 3.9% (up from 3.7%).
In the consumer discretionary sector, Amazon (AMZN 1327.31, +32.73) climbed 2.5% to a new all-time high while Wynn Resorts (WYNN 195.23, +15.59) spiked 8.7% after reporting better-than-expected revenues for the fourth quarter. WYNN shares finished Monday at their best level in more than three years.
Biotechnology shares also had a positive showing, sending the iShares Nasdaq Biotechnology ETF (IBB 115.52, +3.52) higher by 3.1%, but the broader health care sector (+0.7%) finished roughly in line with the S&P 500. Celgene (CELG 102.91, +0.26) added 0.3% after announcing it plans to acquire Juno Therapeutics (JUNO 86.00, +18.19) for $9 billion, and French drugmaker Sanofi (SNY 43.20, -1.40) lost 3.1% after announcing it plans to acquire Bioverativ (BIVV 103.79, +39.68) for $11.6 billion. Juno Therapeutics and Bioverativ surged 26.8% and 61.9%, respectively.
The materials (-0.2%) and industrials (unch) sectors were the only groups to finish in negative territory. Within the industrial space, General Electric (GE 16.17, -0.09) dropped 0.6%, extending its three-month loss to 32.2%, after Bank of America/Merrill Lynch downgraded GE shares to 'Neutral' from 'Buy.'
In the bond market, U.S. Treasuries finished Monday mostly flat, with the benchmark 10-yr yield unchanged at 2.66%.
Elsewhere, equities had a good day in Europe, evidenced by the Euro Stoxx 50, which climbed 0.4%. Germany's Social Democrats (SPD) agreed to pursue formal coalition talks with German Chancellor Angela Merkel's CDU/CSU conservative bloc, a positive sign for a country that's faced political uncertainty for months.
In Asia, the major stock indices finished modestly higher, with India's Sensex (+0.8%) climbing to a new all-time high.
Investors did not receive any economic data on Monday. Tuesday's economic calendar is also blank.