Wall Street stocks, led by technology companies, rose again Monday amid continued positive sentiment on US monetary policy and the prospects for a US-China trade deal. The Dow Jones Industrial Average gained 0.7 percent to end the week's opening session at 25,239.37. The broad-based S&P 500 also advanced 0.7 percent to close at 2,724.87, while the tech-rich Nasdaq Composite Index jumped 1.2 percent to 7,347.54.
"The market has certainly found the path of least resistance higher," chief market strategist at National Securities, Art Hogan, said of the market's drift upward in the wake of a blowout January.
Key drivers for the rally include reassurances from the Federal Reserve of a cautious approach to further interest rate hikes, positive commentary by Beijing and Washington on trade talks, and a solid earnings season, Hogan said.
Most large tech companies rose, including Apple, Facebook and Microsoft, all of which gained more than two percent.
Key earnings this week include Google-parent Alphabet, Disney and General Motors, while the economic calendar includes the monthly Institute for Supply Management survey on the services sector, and the delayed US trade balance for November, held up due to the five-week-long government shutdown.
Among individual companies, Clorox jumped 5.7 percent following earnings and revenue figures that topped analyst expectations.
Battery-technology company Maxwell Technologies shot up 49.5 percent after announcing it had agreed to be acquired by Tesla Motors for about $218 million in stock. Tesla added 0.2 percent.
Papa John's surged 9.0 percent after announcing that activist investor Starboard Value would invest $200 million in the company and install two Starboard-affiliated directors, including Starboard CEO Jeffrey Smith as chairman.
FAANG earnings have been a mixed bag so far. Shares of Apple and Facebook Inc rose after those companies' quarterly results, while downbeat forecasts from Netflix Inc and Amazon.com Inc dragged down those companies' shares.
Continued optimism regarding a possible trade truce between the United States and China also boosted tech shares in particular, said Shawn Cruz, manager of trading strategy at TD Ameritrade in Jersey City, New Jersey.
"That's the theme that's going to be driving markets for the next couple of months, a focus on geopolitical headlines," he said. "There's not any negative news developing on the trade dispute with China front. That's giving tech a little bit of a bid today."
S&P 500 industrial stocks, another trade-sensitive group, posted the second-highest percentage gain among sectors, advancing 0.9 percent.
However, declines in shares of UnitedHealth Group Inc and Johnson & Johnson pulled the healthcare sector 0.6 percent lower.
After having dropped nearly 20 percent below its record Sept. 20 close, the S&P 500 is now less than 8 percent away from reaching that level. US stocks have been lifted so far this year by the Federal Reserve's resolve to be "patient" with further interest rate hikes in addition to signs of progress in US-China trade talks.
Earnings season has also been relatively positive. About 71 percent of the S&P 500 companies that have reported so far have exceeded analysts' estimates, according to IBES data from Refinitiv.
Analyst estimates for fourth-quarter profit growth are now at 15.4 percent. The profit growth forecast for the first quarter of 2019, however, is much lower at 0.5 percent.
Allergan Plc shares dropped 4.1 percent after the FDA approved Evolus Inc's cheaper version of blockbuster Botox. Evolus shares jumped 12.4 percent.
Shares of Ultimate Software Group Inc surged 20.1 percent after the HR software provider announced that it had agreed to be acquired in a deal valued at about $11 billion.
Advancing issues outnumbered declining ones on the NYSE by a 1.71-to-1 ratio; on the Nasdaq, a 1.94-to-1 ratio favoured advancers.
The S&P 500 posted 10 new 52-week highs and no new lows; the Nasdaq Composite recorded 58 new highs and 13 new lows.
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