Stocks started the morning looking like they'd be lower as Boeing (BA) presented a serious headwind to the Dow and a downward revision to the retail sales estimate for December was not helping either. However, upgrades of some tech heavyweights were a tailwind for the Nasdaq and the Dow recovered as Boeing cut its early losses in half. By a few hours into trading all of the major indexes, including the blue chip industrials average, were solidly in the green and didn't look back from there. The Dow was able to post a gain of nearly 1% despite the drop in Boeing shares while the Nasdaq added 2% to kick off the new week of trading.
ECONOMIC EVENTS: In the U.S., retail sales rebounded 0.2% in January, which was a bit better than expectations for them to be flat month-over-month. However, December's poor report was made even worse with revisions, as retail sales in the last month of 2018 are now estimated to have fallen 1.6% overall, revised down from a prior estimated decline of 1.2%. Business inventories rose 0.6% in December, while sales fell 1.0%.
In White House news, the Wall Street Journal reported that the Trump administration has proposed a $4.7T budget that would massively cut spending on safety-net programs while effectively exempting the Pentagon from strict spending limits set to take effect in fiscal 2020. The Journal also noted in a different report that President Trump plans to request $8.6B for additional barriers along the southern U.S. border as part of his budget proposal.
TOP NEWS: Shares of Boeing (BA) dropped 5% following this weekend's crash of an Ethiopian Airlines 737 Max 8 that killed all 157 people on board. Analysts weighed in on Monday, with several saying that this crash, as well as the Lion Air crash six months earlier, are not expected to meaningfully impact Boeing's financials.
In M&A news, Nvidia (NVDA) announced a deal to acquire Mellanox (MLNX) for $125 per share in cash, representing a total enterprise value of approximately $6.9B. Following the deal announcement, Mellanox shares gained about 8% to close at near $118 per share, while Nvidia finished 7% higher.
Meanwhile, Barrick Gold (GOLD) and Newmont Mining (NEM) put their takeover fight to bed by agreeing to create a joint venture combining their respective mining operations, assets, reserves, and talent in Nevada. As a result of this agreement, Barrick has withdrawn its Newmont acquisition proposal and its proposals for the Newmont annual general meeting, while Goldcorp (GG) announced that it has consented to and fully supports the announced JV.
Additionally, Tesla (TSLA) was in focus after stating in a blog post that it has decided to keep significantly more stores open than previously announced as the company continues to evaluate them over the course of several months. "As a result of keeping significantly more stores open, Tesla will need to raise vehicle prices by about 3% on average worldwide. In other words, we will only close about half as many stores, but the cost savings are therefore only about half," Tesla said in its post.
MAJOR MOVERS: Among the noteworthy gainers was Apple (AAPL), which rose 3.5% after BofA Merrill Lynch analyst Wamsi Mohan, who had cut his firm's rating on Apple in early November to Neutral, returned his rating to Buy and raised his price target for the shares to $210 from $180. Also of note, Apple announced that it will be hosting a "special event" live from the Steve Jobs Theater in Cupertino, California on March 25. Also higher was Genesee & Wyoming (GWR), which gained 9% after Bloomberg reported that it is exploring strategic options, including the potential sale of a minority stake.
Among the notable losers was Care.com (CRCM), which fell 12.5% after the Wall Street Journal reported that the company does not verify credentials of recommended caregivers. Also lower was Cronos Group (CRON), which fell 4% after BMO Capital analyst Tamy Chen downgraded the stock to Underperform from Market Perform, citing its "elevated" valuation.
INDEXES: The Dow rose 200.64, or 0.79%, to 25,650.88
, the Nasdaq gained 149.92, or 2.02%, to 7,558.06
, and the S&P 500 advanced 40.23, or 1.47%, to 2,783.30.