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Stocks close off highs after Trump tweets about Iran deal

CNBC logo CNBC 5/7/2018 Fred Imbert and Alexandra Gibbs

Stocks closed higher on Monday as technology shares posted a three-day winning streak. However, the major averages closed well off the highs of the day after President Donald Trump tweeted he will be announcing his decision on the Iran deal on Tuesday.

The Dow Jones industrial average ended 94 points higher after rising as much as 200 points, while the S&P 500 posted a gain of 0.4 percent. The Nasdaq composite rose 0.8 percent after rising more than 1 percent.

Trump — who has railed against the U.S.-Iran nuclear deal signed in 2015 — sent his tweet about the Iran decision at 2:44 p.m. ET. The deal lifts sanctions on Iran in exchange for the Middle Eastern nation curbing its nuclear program.

"Oil dove pretty good on that, then energy stocks led us off the highs," said Dave Lutz, head of ETF trading at JonesTrading. Crude fell in after-hours trading after settling 1.5 percent higher.

The major averages initially rose on the back of strong gains in energy stocks. The Energy Select Sector SPDR Fund (XLE) rose as much as 2.3 percent before closing 0.1 percent higher.

Energy stocks got a boost from rising oil prices earlier, as crude hit highs not seen since late 2014. Prior to the U.S. open, U.S. crude rose above $70 per barrel, while Brent hit $75.89 — a level not seen since November 2014.

"The oil market has turned a corner. Demand is rising and supply is getting tighter," said Peter Cardillo, chief market economist at Spartan Capital Securities. "Just based on fundamentals, we're looking at $72-to-$75 per barrel."

Nonetheless, stocks added to the strong gains seen in the previous session. On Friday, the major averages jumped more than 1 percent as shares of Apple hit an all-time high on news that Warren Buffett's Berkshire Hathaway bought 75 million shares of the company in the first quarter. Apple gained 0.7 percent on Monday.

In corporate news, Nestle agreed to pay $7.15 billion to Starbucks to for the rights to sell the coffee chain's products globally. Starbucks shares briefly rose before trading slightly lower. 

Meanwhile, Blackstone reached a deal with Gramercy Property Trust to buy it for $7.6 billion in cash. Gramercy's stock shot up more than 15 percent.


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