Dow, S&P 500 End Higher on New Nafta Deal; Nasdaq Slips
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Here Are 3 Hot Things to Know About Stocks Right Now
- The Dow Jones Industrial Average I:DJI rose sharply on Monday after the U.S. and Canada secured a trade deal. The index closed the third quarter on Friday with a gain of 9%.
- General Electric Co. (GE) - Get Report jumped 7% after the company announced CEO John Flannery, who was appointed in August 2017, was being replaced by board member Larry Culp.
- Pfizer Inc. (PFE) - Get Report rose 0.5% after the drug giant said CEO Ian Read would step down by the end of the year.
Wall Street Overview
Stocks ended mostly higher on Monday, Oct. 1, after White House trade officials reached an agreement with Canada to revamp the North American Free Trade Agreement in a deal that removes tariff risks from around $1.2 trillion worth of a goods each year.
The United States-Mexico-Canada Agreement (USMCA), reached just hours before a self-imposed deadline of midnight ET, includes a major concession from Canada on access to its dairy market, but also a climb down from U.S. Trade Representative Robert Lighthizer, who agreed to maintain a dispute settlement panel with America's largest export market.
Other details surrounding the deal, and its impact on issues such as automotive supply chain origins, steel and aluminum tariffs and the contentious issue of U.S.-Canada lumber trading, still haven't been fully revealed. But the framework agreement does remove a significant tariff-related risk for the global financial markets heading into the final months of the year.
The Dow Jones Industrial Average I:DJI jumped 194 points, or 0.73%, to 26,652, the S&P 500 I:GSPC rose 0.4%, while the Nasdaq I:IXIC fell 0.1%.
Leading the Dow higher were American Express Co. (AXP) - Get Report , Boeing Co. (BA) - Get Report and Chevron Corp. (CVX) - Get Report .
President Trump called the trade agreement a "new dawn" for the auto industry in the United States. Shares of General Motors Co. (GM) - Get Report and Ford Motor Co. (F) - Get Report rose 1.6% and 0.8%, respectively.
General Electric Co. (GE) - Get Report rose 7% after the company announced CEO John Flannery, who was appointed in August 2017, was being replaced by board member Larry Culp "effective immediately." Culp also will serve as chairman.
GE also said weakness in the GE Power business will mean it will fall short of indicated guidance for free cash flow and earnings for fiscal 2018. GE also said the Power business will take a goodwill charge of nearly $23 billion, although it noted the final amount was "not yet finalized and remains subject to review."
"GE remains a fundamentally strong company with great businesses and tremendous talent. It is a privilege to be asked to lead this iconic company," Culp said in a statement. "We will be working very hard in the coming weeks to drive superior execution, and we will move with urgency."
Culp served as CEO of Danaher Corp. from 2000 to 2014.
- GE's Stock Soars From Its Own Electric Shock
- GE Surges as John Flannery Ousted After Miserable Year; Larry Culp Named New CEO
Tesla Inc. (TSLA) - Get Report surged 17% on Monday after the electric vehicle company's CEO, Elon Musk, agreed over the weekend to settle with the Securities and Exchange Commission a complaint that he violated federal securities laws with several tweets pertaining to a take-private offer for Tesla.
Musk will remain as CEO of the company but will step down as chairman for at least three years. Musk also agreed to pay a civil penalty of $20 million.
The SEC also fined Tesla $20 million and said the company needed to add two independent directors.
- Tesla's Musk to Step Down as Chairman as Part of SEC Settlement
- SEC Chair Suggests Musk Too Critical to Remove From Tesla
- SEC Looks the Other Way and Elon Musk Laughs All the Way to the Bank
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Facebook Inc. (FB) - Get Report could face a fine of as much as $1.63 billion from European regulators for a data breach announced Friday, Sept. 28, in which hackers compromised the accounts of more than 50 million users, The Wall Street Journal reported.
Facebook was down 1.2%.
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Pfizer Inc. (PFE) - Get Report rose 0.5% after the drug giant said CEO Ian Read would step down by the end of the year.
Read, who has led Pfizer since 2010, would be replaced by current Chief Operating Officer Albert Bourla but would transition to executive chairman.
Oracle Corp. (ORCL) - Get Report said Thomas Kurian, the company's president of product development who was leading its cloud-computing business, has resigned, three weeks after announcing he was taking an extended leave of absence. The stock was up 0.5%.
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