Stocks pop after new US-Canada-Mexico deal
(CNN Money) — The stock market appears to like the new trade agreement between the United States, Canada and Mexico.
Stocks popped after all three countries agreed to an 11th hour deal to replace NAFTA.
The Dow rose more than 190 points, a gain of about 0.8%. The S&P 500 and Nasdaq were also sporting solid gains in early trading.
The reworked trade deal, announced late Sunday night, was reached after Canada agreed to give US dairy farmers greater access to the Canadian market.
The United States also agreed to make concessions on some automobile tariffs for cars and trucks built in Canada and Mexico as part of the agreement, which replaces NAFTA and will be called the United States-Mexico-Canada Agreement (USMCA).
Shares in major automakers rose on the news, including GM and Ford which were both up nearly 2% at the market open.
It’s not just the trade deal helping move the markets.
The surprise ouster of General Electric CEO John Flannery and a deal between Tesla and the SEC are also having a big effect.
Shares of GE soared nearly 14% following the news that Flannery, who had only been CEO since August 2017, is being replaced by Larry Culp, a former head of industrial conglomerate Danaher.
Culp, who joined GE’s board in April, faces a difficult task in getting GE back on track. GE also announced Monday that it was taking a charge tied to its struggling GE Power unit. The stock had fallen 35% so far this year prior to Monday’s surge.
GE’s market value slipped below $100 billion last week for the first time in more than nine years. And the company was removed from the Dow Jones Industrial Average in June after a more than 100-year stay in the iconic market barometer.
Tesla was also set to rally Monday after the electric car maker reached a settlement with the Securities and Exchange Commission that will require Elon Musk to step down as chairman but allow him to stay on as CEO.
Shares of Tesla were up 16% in early trading. The stock plunged 14% Friday on the news that the SEC had filed a lawsuit accusing Musk of making “false and misleading statements” earlier this summer when he tweeted that he had “funding secured” for a deal to take Tesla private.
As part of Tesla’s deal with the SEC, Musk did not admit to any wrongdoing. The company is also paying a $20 million fine.