Stocks Close Sharply Higher Amid Easing Geopolitical Concerns - U.S. Commentary

(RTTNews) - Stocks moved sharply higher over the course of the trading day on Monday, extending the notable upward move seen over the past several sessions. With the gains on the day, the tech-heavy Nasdaq ended the session at its best closing level in over fourteen years.

The major averages remained firmly positive going into the close, holding near their best levels of the day. The Dow jumped 175.83 points or 1.1 percent to 16,838.74, the Nasdaq surged up 43.39 points or 1 percent to 4,508.31 and the S&P 500 advanced 16.68 points or 0.9 percent to 1,971.74.

The strength on Wall Street was largely due to easing geopolitical concerns amid news that officials from Ukraine and Russia met to discuss a possible truce.

Ukrainian Foreign Minister Pavlo Klimkin met his Russian counterpart Sergei Lavrov in Berlin, with Klimkin saying the talks had brought "moderate progress."

The easing worries about the conflict in Ukraine led to a rally by stocks in Europe, adding to the positive sentiment on Wall Street.

On the U.S. economic front, the National Association of Home Builders released a report showing an unexpected improvement in homebuilder confidence in the month of August.

The report said the NAHB/Wells Fargo Housing Market Index climbed to a reading of 55 in August from 53 in July. Economists had expected the index to come in unchanged compared to the previous month.

With the unexpected increase, the housing market index rose to its highest level since reaching a reading of 56 in January.

Among individual stocks, shares of Dollar General (DG) moved sharply higher after the discount retailer announced an offer to acquire rival Family Dollar (FDO) for approximately $9.7 billion. The offer tops a bid by Dollar Tree (DLTR).

Theme park operator SeaWorld Entertainment (SEAS) also showed a notable move to the upside after Credit Suisse initiated coverage on the company's stock with an Outperform rating.

On the other hand, shares of Dollar Tree came under pressure on the day following the news of Dollar General's rival bid for Family Dollar.

Sector News

Airline stocks turned in some of the market's best performances on the day, driving the NYSE Arca Airline Index up by 2.9 percent. The gain extended a recent upward move by the index, which has climbed well off the two-month closing low set earlier this month.

Hawaiian Airlines parent Hawaiian Holdings (HA) and United Continental (UAL) posted standout gains within the sector, jumping by 4.8 percent and 4 percent, respectively.

Considerable strength was also visible among trucking stocks, as reflected by the 1.9 percent gain posted by the Dow Jones Trucking Index. With the gain, the index reached a new record closing high.

Steel stocks also saw significant strength on the day, resulting in a 1.7 percent gain by the NYSE Arca Steel Index. AK Steel (AKS) helped lead the sector higher, surging up by 8 percent.

Railroad, housing, and defense stocks also showed strong moves to the upside, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a lackluster performance during trading on Monday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both ended the day only just above the unchanged line.

Meanwhile, the major European markets showed strong moves to the upside. The U.K.'s FTSE 100 Index advanced by 0.8 percent, while the French CAC 40 Index and the German DAX Index jumped by 1.4 percent and 1.7 percent, respectively.

In the bond market, treasuries gave back some ground after ending the previous session notably higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 4.2 basis points to 2.387 percent.

Looking Ahead

Development overseas may continue to impact trading on Tuesday, although traders are also likely to keep eye on reports on housing starts and consumer price inflation.