Wall Street gains as defense, tech stocks rise

By Tanya Agrawal

(Reuters) - Wall Street was higher in late morning trading on Monday, boosted by technology shares and as defense stocks rose after a multi-billion dollar arms deal between the United States and Saudi Arabia.

President Donald Trump visited Saudi Arabia over the weekend and sealed $110 billion in deals in which Riyadh will buy U.S. arms to help it counter Iran, with options running as high as $350 billion over 10 years.

Shares of defense firms such as General Dynamics, Raytheon, Boeing and Lockheed Martin were up between 1 percent and 2.2 percent.

"The bar for success has been set extremely low for President Trump and it seems that he's been able to meet that over the weekend," said Kim Forrest, senior equity research analyst, Fort Pitt Capital Group in Pittsburgh.

 

Trump's visit is his first foreign trip since taking office and one the White House hopes will shift the focus away from domestic controversies such as his firing of a former FBI head last week and reports of his administration's links to Russia.

"The commentary on what happened in Saudi Arabia, most of it, was good. Because we were down last week because of political news the inverse is true too: that nothing bad happened over the weekend in political news."

At 10:47 a.m. ET (1447 GMT) the Dow Jones Industrial Average was up 79.39 points, or 0.38 percent, at 20,884.23, the S&P 500 was up 7.16 points, or 0.30 percent, at 2,388.89 and the Nasdaq Composite was up 31.16 points, or 0.51 percent, at 6,114.86.

Gains were broad based, with nine of the 11 S&P sectors trading higher, led by the tech sector's 0.55 and industrials index's 0.50 percent rise.

Boeing was the biggest boost on the Dow. Amazon's near 1 percent rise was the biggest positive influence on the S&P and the Nasdaq.

Forrest said that while strong earnings and mostly positive economic data will help provide support, the market will continue to be susceptible in the near term to political developments and what it means for Trump's agenda for tax cuts and higher infrastructure spending.

Also bolstering the market was a 1 percent gain in oil prices due to confidence that top exporters will this week agree to extend supply curbs, or even be deepen cuts.

Ford was up 1.7 percent at $11.05 after the automaker named James Hackett, who heads its unit developing self-driving cars, as chief executive, responding to investors' growing unease about its stock price and prospects.

Berkshire Hathaway was up about 0.8 percent after Barron's said on Saturday the conglomerate's stock could see double digit gains over the next year and a half even if Chairman Warren Buffett decided to retire.

Advancing issues outnumbered decliners on the NYSE by 1,798 to 938. On the Nasdaq, 1,621 issues rose and 999 fell.

The S&P 500 index showed 31 new 52-week highs and one new low, while the Nasdaq recorded 74 new highs and 24 new lows.

(Reporting by Tanya Agrawal; Editing by Savio D'Souza)