Stocks showed early strength Monday as China stocks and U.S. export names rallied on a delay in tariffs. Meanwhile, biotech merger news added some early fire and Netflix (NFLX) climbed further into a buy range after a winning night at the Oscars, according to Investor’s Business Daily.
Spark Therapeutics (ONCE) spiked after agreeing to a $4.3 billion takeover from Roche Holding(RHHBY). General Electric (GE) soared after agreeing to sell its biopharma testing business to Danaher (DHR) for $21.4 billion. Other potential biotech targets, led by BioMarin Pharmaceuticals (BMRN), posted sympathy gains.
The Dow Jones industrial average rose 0.6% soon after the open. The S&P 500 index advanced 0.55% and the Nasdaq composite 0.85%.
BioMarin topped the Nasdaq 100, up 6%, with China stocks crowding the top of the index. GE stock and Danaher had the top early gains among S&P 500 stocks.
Dow Jones: Caterpillar, Intel, Boeing
China sensitive Caterpillar (CAT), Boeing (BA) and Intel (INTC) led the Dow early Monday. Caterpillar stock rose 1.7%. The heavy equipment giant had cracked back above its 200-day moving average last week for the first time since October. It closed Friday less than 3% below a potential buy point in a bottoming base, though most of the pattern is below the 200-day line.
Intel gained 1.1% early. Shares have been creating a symmetrical cup base since July. Shares ended Friday 10% below a potential buy point at 57.70.
Netflix Earns An Oscar Boost; In Buy Range
Netflix rumbled 2% higher after its original, Spanish-language film Roma took three Oscars for director, cinematography and best foreign-language film. Roma also had earned the Golden Globe for best foreign picture.
Netflix shares ended Friday well within a buy range above a 358.95 buy point in an eight-month cup-with-handle base. The buy range runs through 376.89. Netflix stock cleared the buy point in low volume.
China Trade Tariffs Delayed: Shanghai Spikes
Stocks in China spiked Monday, after President Donald Trump indicated on Sunday that a tariff increase scheduled for the end of the week was, for the time being, on hold. This means tariffs on China-made imports with $200 billion a year will not increase from 10% to 25% as of Saturday morning. The delay avoids an almost-certain retaliatory tariff increase from China, and a sharp escalation of trade hostilities between the U.S. and China. Chinese negotiators are scheduled to leave Washington for Beijing on Monday. No date has yet been arranged for a discussed summit between President Trump and Chinese President Xi Jinping.
The Shanghai Composite slammed home a 5.6% advance, lifting the index to its highest level since June. Hong Kong’s Hang Seng index ticked 0.5% higher, putting it more than 16% above an early January low.
China Stocks: IPOs On Fire, Alibaba Bases
China stocks rallied, many of them in bases, with recent IPOs hammering out the top early advances. Huya spiked 6.7%, Pinduoduo 2.7% and Qutoutiao seized 3.3% gain.
Qutoutiao traded below a 14.54 buy point in a severe cup-with-handle base — the stock’s first base pattern.
Alibaba muscled up 3.6%. The stock has been building a first-stage base since June. It closed Friday 20% below a possible buy point at 211.80. The stock is above the midway point of the base’s left side, which means it could potentially shape a handle and offer a lower buy point.
Brexit Vote Delayed
In Britain, Prime Minister Theresa May delayed a vote on her European Exit trade plan until March 12, just 17 days before the March 29 deadline for the official Brexit to occur. The move tries to hold together parliamentary support, with lawmakers threatening to resign over a “no-deal” Brexit.
Beginning March 30, the U.K. will officially lose all trade benefits with the EU, leaving much uncertainty as to how trade in many industries — and the policing and government management of that trade — would even take place. Lawmakers are scheduled to discuss the current status of May’s exit plan on Wednesday.