Defense stocks lifted Wall Street to begin the week after Donald Trump's first leg of a trip abroad resulted in billions of dollars worth of deals.
The S&P 500 was up 0.3%, the Dow Jones Industrial Average increased 0.4%, and the Nasdaq rose 0.52%.
Shares of Lockheed Martin (LMT) and Dow component Boeing (BA) rose Monday after both companies were seen walking away as winners from the weekend's Saudi deals bonanza, which saw Trump and representatives for American companies inking more than $350 billion of deals. Lockheed won contracts worth around $28 billion during the state visit, which will see Saudi Arabia buying air and missile defense equipment from it, along with navy ships, aircraft and helicopters. Boeing was also another big winner after it said that the Saudis have agreed to buy a series of new aircraft, weapons systems and helicopters.
Trump is in the middle of a nine-day trip, his first abroad since assuming office in January. Trump has arrived in Israel and will also visit Vatican City during this trip. The trip comes at an inopportune time for the president after two weeks of bombshells tied to his campaign's relations with Russia during the election.
A senior White House adviser close to the president is a person of interest in the investigation into the Trump campaign's possible collusion with Russia, The Washington Post reported on Friday afternoon. The report also indicated that investigators are shifting into a "more overtly active phase" of discovery with the "intensity of the probe ... expected to accelerate in the coming weeks."
A separate report from The New York Times, published nearly simultaneously, said Donald Trump told Russian officials last week that the former FBI Director James Comey was a "real nut job" and that firing him had relieved him of pressure over the investigation. The latest allegation cements the notion that Trump fired Comey to impede the Russia investigation, rather than the original justification over his handling of Hillary Clinton's emails.
Crude oil prices climbed on Monday ahead of a meeting among some of the world's largest oil producers later this week. An extension to the Organization of Petroleum Exporting Countries deal will be the main point of conversation when the 13 member countries meet in Vienna on May 25. The current agreement, established last November, is set to expire at the end of June.
West Texas Intermediate crude rose 0.9% to $50.79 a barrel on Monday.
Jim Cramer recommends holding onto oil stocks for now, but to be prepared to pull the trigger if crude reaches $53. Get his insights with a free trial subscription to our premium site for investors, Real Money.
Ford (F) confirmed on Monday that CEO Mark Fields is choosing to retire on Monday amid pressure due to a share price that has fallen more than 10% year to date and more than 17% over the past 12 months. Ford will promote current Ford Smart Mobility Chairman Jim Hackett to the top position. Monday's announcement ends Fields' three-year run as CEO with the company as well as his 28-year career at the automaker based in Dearborn, Mich.
The stock of the U.S. automaker has declined almost 40% since Fields took over the company. Fields' ousting come just weeks after Dearborn-based Ford delivered a dire set of first-quarter results, which brought about yet more share price weakness.
"Fields took a long-term approach to making Ford a mobility company," Rebecca Lindland, executive analyst at Kelley Blue Book, wrote in a note. "However, investors -- which include the super-voting shares the Ford family owns and just confirmed again at the annual meeting May 11 -- were not so patient... The reality was he couldn't rally the troops internally and pacify investors and the Ford family externally."
Ford shares were up 1.7% on the news.
Over on our premium site for investors, Real Money, Brian Sozzi said what happened to Ford's CEO should be a call to action for the auto industry. Read his insights with a free trial subscription to Real Money.
Health care stocks were on watch after the White House requested another 90-day delay in a lawsuit over Affordable Care Act insurance subsidies, according to Politico. The Trump administration will continue to pay insurers those cost-sharing reductions. The payments subsidize insurers for plans for low-income earners who access insurance through the Obamacare exchanges. The White House has asked for a delay in the case while it determines its position on the original 2014 lawsuit and subsequent appeal.
The Federal Reserve is in focus on Monday with several speeches from members of the central bank scheduled. Fedspeak could serve to prime markets for a potential interest rate hike in June. Markets already have high expectations for a move at the next meeting of the Federal Open Market Committee, the second of three expected rate increases this year.
Wall Street has priced in a nearly 74% chance of a 25-basis-point increase to the federal funds rate when the FOMC meets June 13-14, according to CME Group fed funds futures.
Minneapolis Fed President Neel Kashkari will deliver welcoming remarks at the Opportunity and Inclusive Growth Institute Conference in Minneapolis on Monday, while Fed Gov. Lael Brainard will give the keynote address. Philadelphia Fed President Patrick Harker will discuss "The Link Between Physical and Economic Well-Being" at the Jefferson College of Health Professions and Jefferson College of Pharmacy Commencement Ceremony in Philadelphia.
Clariant (CLZNY) shares rose after the Swiss chemicals group said it agreed to an all-share "merger of equals" with U.S.-based Huntsman (HUN) that would create a company valued at about $20 billion. A merged HuntsmanClariant would have annual revenue of about $13.2 billion, the companies said in a statement, based on pro-forma 2016 sales and adjusted operating profit of $2.3 billion. The deal is expected to close before the end of the year.
Nutraceutical International (NUTR) rocketed nearly 50% higher after agreeing to be acquired by private-equity firm HGGC. The firm will purchase Nutraceutical stock for $41.80 in cash, a 49% premium to its close on Friday.
- 5 Things You Must Know Before the Market Opens Monday
- President Trump Arrives in Israel, Gives Speech on Collaboration
- Lockheed and Boeing Rise in Premarket Following Saudi Deals Bonanza
- We Quickly Learned Why Ford's New Truck Named After a Killer Dinosaur Is a Beast
- Cisco Could Be Looking to Acquisitions to Help Solve Its Biggest Challenge