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S&P 500 and Nasdaq Close at Record Highs as Wall Street Awaits Signing of U.S.-China Trade Pact

The phase one trade agreement between the U.S. and China is expected to be signed Wednesday.
  1. Stocks ended higher with the Nasdaq and S&P 500 at record closes as Wall Street awaited the U.S.-China phase one trade agreement that is expected to be signed Wednesday.
  2. Tesla jumped after analysts at Oppenheimer lifted their price target on shares of the electric vehicle company to a Wall Street high of $612.
  3. CVS Health is Real Money's Stock of the Day ahead of the company's appearance Tuesday at the J.P. Morgan Healthcare Conference.

Stocks ended higher Monday, with the Nasdaq and S&P 500 at record closes, as Wall Street awaited  the U.S.-China phase one trade agreement expected to be signed Wednesday and prepared for the start of fourth-quarter earnings season.

The Dow Jones Industrial Average rose 83 points, or 0.3%, to 28,907. The S&P 500 gained 22.78, or 0.7%, to end at 3,288.13. The Nasdaq gained 95.07, or 1%, to end at 9,273.93. The S&P 500 and the tech-heavy Nasdaq index hit all-time intraday highs Monday.

Treasury Secretary Steven Mnuchin told Fox News on Sunday that details of the trade pact would be made public when the two sides put their signatures on the accord at a White House ceremony.

He also denied reports that terms of the arrangement had been changed during the translation process, and reiterated the Trump administration's position that China has agreed to increase U.S. imports by $200 billion over the next two years, including agricultural products worth between $40 and $50 billion.

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"The language will be released this week and people can see this is a very, very extensive agreement," Mnuchin said.

Also giving stocks a boost were reports that said the Trump administration would remove its designation of China as a currency manipulator ahead of the signing ceremony.

The signing of the trade agreement Wednesday will come just as fourth-quarter earnings season begins, with big U.S. banks leading the charge. Reports from JPMorgan Chase  (JPM) - Get Report, Citigroup  (C) - Get Report and Wells Fargo  (WFC) - Get Report are expected Tuesday.

Tesla TSLA  (TSLA) - Get Report rose sharply Monday after analysts at Oppenheimer boosted their price target on shares of the electric vehicle company to a Wall Street high of $612 and called for the stock's inclusion in U.S. equity benchmarks.

Oppenheimer's Colin Rusch nearly doubled his existing price target for Tesla, arguing the company has reached "critical scale" to support sustainable free cash flows. He also suggests the Elon Musk-controlled company could pose an "existential threat" to transport companies that don't have the ambition or the ability to innovate at Tesla's torrid pace. Shares rose $46.71, or 9.8%, to close at $524.86.

Ford's  (F) - Get Report sales in China declined for the third straight year, falling 26.1%, and the automaker said sales pressure will continue into 2020. Sales in China for Ford dropped 37% in 2018, following a 6% decline in 2017.

Ford sold 567,854 vehicles during 2019 in China, its second-biggest market.

“The pressure from the external environment and downward trend of the industry volume will continue in 2020, and we will put more efforts into strengthening our product lineup with more customer-centric products and customer experiences to mitigate the external pressure and improve dealers’ profitability," said Anning Chen, president and CEO of Ford Greater China.

Aerospace parts maker Woodward WWD will merge with Hexcel HXL, a company that makes lightweight materials for aircraft, space and defense equipment, in a deal that values the combined companies at around $6.4 billion.

The combined company, to be based in Colorado, would create a major aerospace and defense supplier with about 16,000 employees, operations in 14 countries and estimated net revenue of $5.3 billion.

The companies make parts for Boeing  (BA) - Get Report, including the grounded 737 MAX jet, and Airbus.

CVS Health  (CVS) - Get Report is Real Money's Stock of the Day ahead of the company's appearance Tuesday at the J.P. Morgan Healthcare Conference.

JPMorgan Chase, Citigroup and CVS are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells the stocks? Learn more now.