The stock market rose after a top China official made positive comments about trade talks and investors looked to stronger earnings reports this week to bolster share price. FAANG stocks, including some heavily exposed to China's economy, posted gains: Facebook (FB), Apple (AAPL), Amazon (AMZN), Netflix (NFLX) and Alphabet's Google (GOOGL).
XThe Nasdaq composite added 0.9%, while S&P 500 rose 0.7%. The Dow Jones Industrial Average struggled early but finished 0.2% higher, as a steep 3.8% drop in Boeing (BA) stock hurt the index. The small-cap Russell 2000 Index added 1%.
But volume fell compared with the same time on Friday, continuing a noteworthy trend toward lower volume on up days, and higher volume on down days. NYSE volume fell 13% and Nasdaq turnover by nearly 14%.
Growing trade optimism boosted shares earlier. Chinese Vice Premier Liu He said that the two sides have made "substantial progress" toward a trade deal. He vowed that Beijing and the U.S. would work together to hammer out a deal.
FAANG Stocks Rally, But Alphabet Flat
Most FAANG stocks bounced together late in the day on the China news. Facebook rose 2.1%, Apple gained 1.7%, Amazon edged up 1.6%, and Netflix increased 1%. But Alphabet was virtually unchanged.
Apple got a further boost by an upgrade from Raymond James. Analyst Chris Caso said that distribution checks showed strong sales for the new iPhone 11. With Monday's gap-up move, Apple stock is now extended above a flat base entry of 221.47. Apple stock gets a relatively high 89 IBD Composite Rating, and remains No. 1 in its industry group.
Alphabet, the parent of Google, has settled into a long consolidation run out of a cup with handle. After testing the 50-day moving average several times, Google stock is just below a 1,268.49 buy point.
Among IBD's Stocks on the Move, car and truck salvaging company Copart (CPRT) jumped 1.6%. Copart stock has a best-possible Composite Rating, along with an impressive 98 EPS Rating and a rock-solid 96 Relative Strength Rating. Copart stock is now at the very top of the 5% buy range from a 79.84 buy point out of a flat base.
Also moving up, turnaround food chain Chipotle Mexican Grill (CMG) gained 1.2%, pushing it to within a hair's breadth of an 858 buy point from a flat base. Chipotle stock has repeatedly tested its 50-day line in recent weeks and each time bounced above it, a bullish sign.
Stock Market: IBD 50 Winners
Both Chipotle and Copart are also on the IBD 50 list of top growth stocks, a key screen for finding market winners.
Among other stocks making moves on that list, Essent Group (ESNT) rose 1.8%, after breaking out of a double-bottom base above a 50 buy point on Sept. 20. After that move, private mortgage insurer Essent slid all the way down to the 8% sell zone, but in recent sessions has recouped those losses and is now in the buy zone. It has a 98 Composite Rating.
Chinese-based social networking platform Momo (MOMO), meanwhile, also got a push from improved trade relations, adding 4%. Momo was added to the IBD 50 list just last week.
RH (RH), the former Restoration Hardware, continued its move into new high ground, gaining 3.8%. Many domestic retailers like RH stock have recently reported stronger earnings and sales as unemployment declines and median incomes show their best gains in decades. RH broke out of a 27-week cup base in early September, but remains well extended near the profit-taking zone above a 157.81 buy point. RH carries a stellar 99 Composite Rating.
Meanwhile, four drug companies agreed to pay a total of $260 million in a closely-watched Cleveland court case in which prosecutors charged the companies with responsibility for the opioid crisis. McKesson Corp. (MCK), Cardinal Health (CAH) and AmerisourceBergen (ABC) agreed to pay $215 million. Meanwhile, Israel-based drugmaker Teva Pharmaceutical (TEVA) agreed to pay $20 million and to donate another $25 million in drugs to treat addiction.
Only Teva came out ahead, marketwise. It rose 8.7%. But McKesson stock fell 3.2%, and Cardinal Health stock dropped 2.2%, while AmerisourceBergen dropped 3.4%.
IBD Stock of the Day discount retailer Costco (COST) dipped 0.6%. As IBD reported Monday, Costco stock is just below a 307.44 buy point coming out of a rare, but powerful, base-on-base formation.
Among exchange-traded funds, the Innovator IBD 50 ETF (FFTY) rose almost 1%. The ETF index reflects the IBD 50 list of top growth stocks.
Please follow Jones on Twitter at @IBD_TJones for more on growth stocks, financial markets and the economy.
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