U.S. stocks drift higher; S&P 500 gets closer to record high

Stan Choe, The Associated Press</span>
Published Monday, March 18, 2019 12:32AM EDT
Last Updated Monday, March 18, 2019 11:23AM EDT

NEW YORK -- U.S. stock indexes drifted upward Monday at the start of a busy week for markets, and the S&P 500 inched back within a few good days of its record high set last autumn.

Energy companies and banks had some of the biggest gains, and the S&P 500 has climbed to within 3.3 per cent of its record high, set in September, after clawing back all of its terrifying drop from December.

Stocks regained their momentum last week and recovered from a five-day stumble following the best start to a year for the S&P 500 in decades.

One key to the recent rally has been the belief that the Federal Reserve will slow its pace of increases for interest rates. The worry in December was that the central bank would raise rates too fast in the face of a slowing global economy and choke off growth. The Fed will meet to discuss interest-rate policy this week, with an announcement scheduled for Wednesday, but economists expect it to announce no change to rates.

Politicians in London, meanwhile, continue to haggle about the United Kingdom's pending departure from the European Union, which could have harmful effects for global trade. The Bank of England will announce its decision on interest rates later this week as well.

KEEPING SCORE: The S&P 500 rose 0.4 per cent, as of 10:50 a.m. Eastern time, and is already up 13 per cent for 2019 so far. That's a bigger gain that it's had in four of the last five full years.

The Nasdaq composite rose 0.5 per cent, and the Russell 2000 index of small-cap stocks gained 0.8 per cent.

The Dow Jones Industrial Average was up 16 points, or 0.1 per cent, at 25,865.

SPURTING HIGHER: Benchmark U.S. crude oil was on pace to settle above $59 per barrel for the first time since November, and the price of natural gas strengthened, which helped lift shares across the energy sector.

Energy stocks in the S&P 500 rose 1 per cent for the largest gain among the 11 sectors that make up the index. National Oilwell Varco jumped 3.7 per cent, Halliburton gained 2.7 per cent and Marathon Petroleum rose 2 per cent.

PAY ME NOW: As more transactions move online, the payment processing industry continues to consolidate.

Fidelity National Information Services said Monday it will buy Worldpay for about $35 billion in stock and cash. Including Worldpay's debt, Fidelity National Information Services valued the dal at $43 billion.

Worldpay's U.S.-listed shares jumped 9.5 per cent. Fidelity National Information Services, also called FIS, slipped 1.1 per cent.

STILL GROUNDED: Boeing fell further as the investigation continues into two recent deadly crashes of its 737 Max 8 plane model. Preliminary information shows clear similarities between the two.

Boeing fell 1.9 per cent, following its 10.3 per cent loss last week.

FED WATCH: The Fed begins a two-day meeting on rates Tuesday, and most investors are expecting very little to come out of it.

Stocks plunged late last year as investors worried about slowing economic growth around the world and feared that future rate increases by the Fed would only worsen it.

Investors were relieved when the central bank pledged early this year to take a patient approach. Some economists say the Fed could release documents Wednesday that would suggest one rate increase in 2019, or possibly zero, after the Fed raised rates four times in 2018 and three times in 2017.

Perhaps more important is what the Fed says about its vast trove of Treasurys. The central bank bought trillions of dollars of Treasurys after the 2008 financial crisis to keep interest rates low and support markets, but it's been slowly letting some roll off as they mature. Investors want to know how much in Treasurys the Fed will ultimately hold onto, and how long it will take to get there.

SEARCHING FOR SINO SIGNS: Investors are still waiting for more progress in the trade dispute between the world's two largest economies.

China's congress on Friday endorsed an investment law that aims to address complaints, particularly from the U.S., that China's system is rigged against foreign companies. The U.S. claims China forces companies to share technology in order to do business in the country.

Chinese indexes rose Monday, with stocks in Shanghai up 2.5 per cent. Hong Kong's Hang Seng rose 1.4 per cent.

In a sign of how fluid the U.S.-China trade talks remain, however, news reports said a meeting between President Donald Trump and Chinese leader Xi Jinping to formalize a deal might be pushed back to June.

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AP Business Writer Yuri Kageyama contributed from Tokyo

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