By Shreyashi Sanyal
(Reuters) - U.S. stocks posted strong gains on Monday, with the benchmark S&P 500 and the Nasdaq hitting all-time highs, as the United States and Mexico reached a deal to replace the North American Free Trade Agreement.
Shares of automakers, which stand to gain from the deal, were higher with Ford up 3.2 percent, General Motors gained 4.6 percent and Fiat Chrysler climbed 4 percent.
Auto parts makers also rose with Goodyear Tire & Rubber Co up 4.6 percent.
The trade-sensitive industrials sector was up about 1.24 percent. Caterpillar rose 2.6 percent and was the second-biggest boost to the Dow Jones industrial average.
United States and Mexico reached a deal to replace NAFTA and talks with Canada were expected to begin immediately in the hopes of reaching a final agreement by Friday, a senior U.S. trade official said.
"I think the question most people have is can the markets go higher? The answer is yes, earnings drive markets and this season has been an incredible one," said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago.
Also helping sentiment was Washington pressing the European Union to speed up trade negotiations.
At 12:52 a.m. EDT the Dow Jones Industrial Average was up 256.14 points, or 0.99 percent, at 26,046.49, the S&P 500 was up 22.08 points, or 0.77 percent, at 2,896.77 and the Nasdaq Composite was up 73.71 points, or 0.93 percent, at 8,019.69.
Nine of the 11 major S&P 500 sectors were higher. The top percentage gainer was the materials sector with a 1.75 percent gain.
The defensive utilities and real estate sectors were down 0.86 percent and 0.41 percent.
Chipotle Mexican Grill slipped 4.5 percent, the most on the S&P, after Wedbush downgraded its shares, citing higher risks to the burrito chain's near-term same-store sales and margin estimates.
Tesla Inc dropped 1.9 percent after abandoning a plan to take the electric carmaker private.
Advancing issues outnumbered decliners for a 2.07-to-1 ratio on the NYSE and a 1.98-to-1 ratio on the Nasdaq.
The S&P index recorded 52 new 52-week highs and no new lows, while the Nasdaq recorded 150 new highs and 23 new lows.
(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta)
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Updated Date: Aug 28, 2018 00:05 AM