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French Election Ignites U.S. Stocks; Banks Lead; China-Based Stocks Mixed

X U.S. stocks shot up at the open Monday as global markets responded favorably to France's presidential vote on Sunday.

The Dow Jones industrial average and S&P 500 jumped 1% while the Nasdaq added 1.2% each.

The success of centrist candidate Emmanuel Macron in the first round of France's presidential election provides a powerful challenge to Marine Le Pen, leader of the National Front party, and raises the odds that France will remain a member of the European Union. From the market's standpoint, that suggests stability.

Stability always earns a premium on the market over uncertainty, sending the CAC 40 in Paris sailing 4.6% higher in afternoon trade. Frankfurt's DAX blazed 3.1% higher and the FTSE 100 in London rallied 1.9%.

Le Pen and Macron face off in a second-round election scheduled May 7.

Among Asia's markets, Tokyo's Nikkei 225 in Japan grabbed a 1.4% gain. China's Shanghai Composite fell 1.4%, while the Hang Seng composite in Hong Kong added 0.4%.

Banks Spike; New Oriental, Hasbro, Philips Climb

Monday's session launches a massive week of earnings reporting, with nearly 200 S&P 500 companies and more than a third of the Dow industrials due to report. But banks were leaders in early action Monday, buoyed by the election result in France.

JPMorgan Chase (JPM) and Goldman Sachs (GS) rose 2% on the Dow. Caterpillar (CAT) was also up 2%.

European banks were on fire, both overseas and in the premarket U.S. session with Deutsche Bank (DB) up 10%, UBS Group (UBS) and Barclays (BCS) each ahead about 5%, and Credit Suisse (CS) up 4% at the open.

On the earnings front, Kimberly Clark (KMB) dropped 1.5% after reporting a first-quarter earnings miss. Halliburton (HAL) added 0.2% after squeaking past first-quarter earnings expectations. Lennox International (LII) tumbled 5% and broke below its 50-day line in big volume following its first-quarter report, with Alcoa (AA), Whirlpool (WHR) and Barrick Gold (ABX) due out after the session's close.

Hasbro (HAS) buzzed up more than 6% after reporting a 42% gain in earnings and a 2% revenue increase, both far above analysts' first-quarter targets. The stock broke out past the 101.18 buy point in a flat base.

Koninklijke Philips (PHG) brightened 6% at the open after reporting stronger-than-expected results for the first quarter. Shares are extended and at new highs, after breaking out past a cup-base buy point at the start of March.

Fortunes were mixed for China-based names in premarket action.

New Oriental Education & Technology (EDU) rose 0.5% at the open. The after-school tutoring chain reported a strong fiscal third quarter, clearing expectations, and issued in-line revenue guidance for its fourth quarter. The stock is about 20% past a 52.47 buy point, and with 20% profits investors can lock in at least some profits.

Changyou (CYOU) dived 7% and Sohu.com (SOHU) fell 3% after reporting their quarter results.

Medical products maker C.R. Bard (BCR) spiked 20% after medical supplies leader Becton Dickinson (BDX) announced it would take control of Bard in a deal valued at $24 billion. Becton projected the deal would add high single-digit accretion to its earnings per share within three years of the closing. Becton Dickinson shares slumped 3% at the open, as Standard & Poor's placed the company on credit watch negative, due to the financial impact of the acquisition.

Econ News: Budget, Tax Plan, Q1 GDP

This week in the U.S., the budget battle in Congress promises to heat up ahead of Friday's expiration of the temporary bill funding government spending. And a pledge from the White House to present a tax reform plan this week could potentially stir some market activity, although expectations for specifics on the play appear to remain generally low. The Commerce Department wraps up the week's economic calendar on Friday with an initial estimate of first-quarter GDP growth.

Today, the Dallas Federal Reserve reports its April manufacturing survey at 10:30 a.m. ET.  Minneapolis Federal Reserve Bank President Neel Kashkari speaks at 11:30 a.m. and at 3:15 p.m. ET.

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