Technology companies helped power a broad rally on Wall Street in afternoon trading Monday after the U.S. and Mexico averted a trade war and potentially damaging tariffs.
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The latest gains put the benchmark S&P 500 index on track to extend its winning streak to a fifth straight day following the strongest week for stocks since November.
U.S. President Donald Trump suspended plans to impose tariffs on Mexican goods after the countries struck a deal on immigration. The spat threatened to raise costs for American companies and consumers and expand a global trade war that already includes China.
Auto and consumer-related companies would have suffered significantly with new tariffs. Ford rose 1.2% and General Motors gained 1.8%. Constellation Brands, which makes Corona beer, rose 2.1%.
Several megadeals also helped nudge stocks higher. Industrial giant United Technologies is merging with weapons contractor Raytheon in a deal that will create an arms powerhouse with more sales than rivals Lockheed Martin and Northrop Grumman. Meanwhile, customer-management software developer Salesforce is buying data analytics company Tableau Software in an all-stock deal valued at $15.7 billion.
Technology companies led the gains and Apple rose 1.6%. Chipmakers made some of the biggest moves, with Nvidia adding 2.8% and Qualcomm rising 2.9%.
Banks were also among the biggest gainers as lower bond prices pushed yields higher. Higher yields raise banks' profits from loan interest. Bank Of America gained 3.3% and Citigroup rose 3%.
Consumer-related and internet stocks also gained ground as investors shifted into high-growth holdings and away from utilities and other safe-play sectors. Amazon climbed 3.7% and Facebook added 1.3%.
Utilities and consumer staples lagged the market.
KEEPING SCORE: The S&P 500 index was up 0.8% as of 1:35 p.m. Eastern time. After a 4.4% gain last week, the benchmark index was 2.5% below its record set on April 30 as of Friday. The Dow Jones Industrial Average rose 143 points, or 0.6%, to 26,127. The Nasdaq composite climbed 1.5% and the Russel 2000 index of smaller companies gained 1%.
Stock indexes in Europe were mostly higher.
STRONG DEFENSE: Raytheon rose 1.4% after the company said it will merge with United Technologies to create one of the world's largest defense contractors.
The combined company will have sales of about $74 billion, pushing it ahead of competitors including Lockheed Martin and Northrop Grumman. Boeing, which has a significant defense segment, has annual sales of about $100 billion.
United Technologies dropped 2%.
Raytheon is known for its missiles, including the Patriot system. United Technologies makes aircraft engines, among other industrial products.
In 2018 there were eight defense sector mergers exceeding $1 billion in value, including an all-stock deal between L3 Technologies and Harris and General Dynamics' acquisition of CSRA Inc., according to PricewaterhouseCoopers.
USE THE FORCE: Tableau shares surged 33.8% after customer-management software developer Salesforce said it would buy the company in an all-stock deal valued at $15.7 billion.
Salesforce fell 5.3%.
Tableau uses self-service analytics to help people with any skill level work with data. Companies using its services include Charles Schwab, Verizon and Netflix. More software and technology companies are adding data analytics operations to bolster their offerings.
Other data companies gained ground following news of the deal. Citi analyst Tyler Radke pointed out several other data analytics companies that could make attractive buyout targets. Alteryx climbed 4%, MongoDB added 3.4% and Talend rose 2.6%.
The deal comes a few days after Google said it is purchasing data analytics firm Looker for $2.6 billion in order to expand its Google Cloud business.