The Dow Jones industrial average unofficially closed up 16.5 points, or 0.09 percent, at 18,533.05, the S&P 500 ended up 5.15 points, or 0.24 percent, to 2,166.89 and the Nasdaq Composite f inished 26.20 points, or 0.52 percent, higher to 5,055.78. Japan's SoftBank Group's US$32 billion deal to buy British chip designer ARM Holdings briefly lifted European equities to a three-week high. The FTSEurofirst 300 index ended 0.2 percent higher at 1,338.06. The MSCI world equity index, which tracks shares in 45 nations, rose 0.92 point or 0.2 percent, to 412.15. (Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 18, 2016. - REUTERS)
NEW YORK: U.S. stocks rallied on Monday, tracking a relief rally that swept through Asian and European markets, after centrist candidate and market favorite Emmanuel Macron won the first round of the French presidential election.
Pro-EU Macron is expected to beat right-wing rival Marine Le Pen in a deciding vote on May 7 according to polls, which were mostly right about the first-round results.
"This alleviates fears that we were going to have to navigate a French exit (from) the European Union," said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.
"This is a classic relief rally showing up most in financials," he said. "We cleared this hurdle and now it's a little bit more clear running."
European banks jumped 7.4 percent while banks on the S&P 500 added 2.8 percent.
The moves across markets point to an unwinding of bets taken in the past few days when traders had turned defensive ahead of the French election.
The Dow Jones Industrial Average rose 216.13 points, or 1.05 percent, to 20,763.89, the S&P 500 gained 25.46 points, or 1.08 percent, to 2,374.15 and the Nasdaq Composite added 73.30 points, or 1.24 percent, to 5,983.82.
MSCI's gauge of stocks across the globe gained 1.56 percent to 453.5 after touching a record high of 453.7.
U.S. investors are also gearing up for the busiest earnings week in at least a decade, with over 190 S&P 500 members, including heavyweights Alphabet and Microsoft, due to report results this week.
"Earnings are coming in better than expected and this is for a quarter where estimates were pretty tight. We didn't see much pullback with estimates in the course of the quarter, so expectations were high and we're beating them," said Art Hogan, chief market strategist at Wunderlich Securities in New York.
Of the 100 S&P 500 companies that have reported results so far, 77 percent have beaten profit expectations, according to Thomson Reuters I/B/E/S. This has helped lift the blended profit growth estimates to 11 percent from 10 percent at the start of the earnings season.
Medical device maker C R Bard jumped almost 20 percent to $302.41 after U.S. medical equipment supplier Becton Dickinson said it would buy Bard for $24 billion.
Defensive trades suffered as traders embraced risk. Spot gold dropped 0.6 percent to $1,276.10 an ounce. The safe-haven Japanese yen weakened 0.58 percent versus the greenback at 109.73 per dollar. The CBOE Volatility index ended at 10.84, its lowest since Feb. 14.
Advancing issues outnumbered declining ones on the NYSE by a 2.47-to-1 ratio; on Nasdaq, a 2.61-to-1 ratio favored advancers.
The S&P 500 posted 72 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 191 new highs and 43 new lows.
About 6.8 billion shares changed hands in U.S. exchanges, above the 6.3 billion daily average over the last 20 sessions
Earlier in Europe Britain's top share index jumped on Monday as banking stocks surged after centrist Emmanuel Macron came out on top in the first round of France's presidential election.
The blue chip FTSE 100 index closed 2.1 percent higher at to 7,246.68 points, its biggest one-day jump since early September 2016 and outpacing the mid caps which closed up 1.3 percent at a new record closing level.
Macron won the first round of voting, qualifying for a run-off alongside protectionist, eurosceptic Marine Le Pen. Polls pointed to Macron easily beating Le Pen in the run-off on May 7, calming market fears in light of the UK's Brexit vote and Donald's Trump's election in the United States.
"It's the pro-growth backdrop that we're now starting to see come through rather than ... ongoing austerity which is providing quite a significant shift with the outlook for the European banks, in particular with the French banks very much leading the way, which of course sees their UK-listed counterparts rally quite significantly today as well," Charles Hanover Investments partner, Dafydd Davies, said.
UK banks jumped 3.1 percent, joining in with a broader risk-on rally among European lenders, which surged 4.8 percent. Shares in Barclays rose 5.4 percent, while Standard Chartered was up 4.8 percent and Royal Bank of Scotland gained 2.8 percent.
Macron still needs to clinch the presidency and win a stable majority in legislative elections in June.
"The reforms Mr Macron is proposing are positive but the question is whether he will have the parliamentary legitimacy to implement these," Barclays European economist, Francois Cabau, said.
"How much of it supports growth over the long term is still very much a question to which we won't have the answer until the 18th of June, and potentially afterwards."
Among individual stock movers, energy provider Centrica was the biggest FTSE faller, down 3.5 percent, while sector peer SSE dropped 1.9 percent after Prime Minister Theresa May's Conservative Party vowed to cap domestic prices if it retains power in an election in June.
Precious metals miner Randgold Resources was among a handful of stocks in negative territory, down 1.4 percent as investors rotated out of more defensive safe-haven stocks.
Blue chips aside, shares in Kennedy Wilson Europe Real Estate (KWE) jumped 14.1 percent after U.S. parent company Kennedy Wilson said it would buy back KWE in an all-share transaction with a combined enterprise value of $8.2 billion.
Computacenter gained 7.6 percent after an upbeat outlook.
Small-cap shoe retailer Jimmy Choo gained 9.9 percent after it put itself up for sale
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