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XAutoplay: On | Off Stocks climbed at the open Monday, boosted by deals announced during President Trump’s visit to Saudi Arabia, by an Apple (AAPL) price target hike and by an unexpected executive turnover at Ford (F).
The Dow Jones industrial average and S&P 500 each climbed 0.4%. The Nasdaq also swung up 0.4%, while the Russell 2000 futures popped 0.5%.
Early Risers: Boeing, Apple, Ford, Lockheed
Defense stocks fueled a large share of Monday’s early action, stirred by more than $300 billion in deals announced Saturday between Saudi Arabia and the U.S. as part of Trump’s official visit to Saudi Arabia.
Boeing (BA) topped the Dow industrial in early trade, up 1.3%. The company announced on Sunday potential deals for up to 16 widebody jets with SaudiGulf Airlines, as well as a number of military-use jets. Boeing shares are trading below a flat base buy point of 85.81, ending Friday in a test of support at their 10-week moving average.
Dow peer General Electric (GE) rose -0.8%. On Saturday, GE announced $12 billion in contracts with the country, focusing on energy, aviation and other areas.
Raytheon (RTN) opened 1% higher. The Waltham, Mass.-based aerospace electronics leader on Saturday announced a strategic partnership with the Saudi Arabia Military Industries Company related to air defense systems, smart munitions, defense cyber security and other areas. Raytheon shares remain in a buy range, above a 157.69 buy point in a flat base.
Lockheed Martin (LMT) opened 2% higher on its own slate of Saudi deals, which include $28 billion in missile defense systems, naval ships, and helicopters, among other items. Shares retook a 270 buy point on Friday.
Oilfield equipment maker National Oilwell Varco (NOV) added more than 1%, boosted by a joint venture to provide Saudi Aramco with high-specification drilling rigs and advanced drilling equipment, as well as training to Saudi engineers, over a 10-year period.
Ford (F) opened up more than 1%. Ford replaced Chief Executive Mark Fields with Jim Hackett, the former CEO of Steelcase (SCS) who has headed Ford’s Smart Mobility experimental operations unit. A press conference has been scheduled for 9:45 am ET today. Fields has held the CEO seat for three years. Ford shares have been in a 34-month decline.
The tone was also generally positive among technology stocks. Apple rose 0.7%. A note from RBC Capital reiterated the stock’s outperform rating and raised its price target to 168, from 157. The note said the company’s multiple strengths could lift its market capitalization above $1 trillion in 12 to 18 months.
IBD 50 stock Lumentum Holding (LITE) vaulted 4% higher in opening trade. The move retook a 56.02 buy point in heavy trade.
Cheetah Mobile (CMCM) bolted 15% higher in early trade. The China-based internet security solutions provider reported mixed first-quarter results. The stock is nine weeks into a 29% deep consolidation.
Chemicals maker Huntsman (HUN) leapt 2% in opening action to a new high. The company agreed to a takeover bid from Switzerland-based Clariant. The all-stock deal would create a chemicals operation with revenue of around $15 billion.
Oil Nears $51; Industrial Activity Surges
Oil prices will be in focus this week ahead of the Organization of Petroleum Exporting Countries meeting on Thursday. West Texas Intermediate benchmark crude backed off its early highs, trading up 0.7% in early action, just below $51 per barrel.
Europe’s markets remained mixed in afternoon trade, rattled by comments from German Chancellor Angela Merkel blaming the European Central Bank for a weak euro. China’s markets ended sharply mixed, with Hong Kong’s Hang Seng index rallying 0.9% while the Shanghai Composite dived 0.5%. The two indexes have generally been moving in opposite directions since late April. In Japan, the Nikkei 225 added 0.5%.
The Federal Reserve Bank of Chicago’s National Activity Index reported a big jump of industrial activity in April, sending the index to a reading of 0.49 – its best reading since November 2014. That was far above March’s 0.08 tally , as well as economist projections for an increase to 0.10.
Minneapolis Federal Reserve Bank President Neel Kashkari and Patrick Harker, president of the Philadelphia Federal Reserve, speak at 10 a.m. ET.