Dow, S&P 500 push higher as tech stocks soar in final week of trade for May

This post was originally published on this site

© Angela Weiss/Agence France-Presse/Getty Images

MARKET SNAPSHOT

Angela Weiss/AFP/Getty Images

U.S. stock indexes climbed Monday, with the Dow on track for a third straight advance, as technology stocks charged higher to begin the final week of trade for May.

What are major indexes doing?

  • The Dow rose 178 points, or 0.5%, to 34,387.
  • The S&P 500 advanced 42 points, or 1%, to 4,197, after hitting an intraday peak at 4,203.13.
  • The Nasdaq Composite Index rose 189 points, or 1.4%, to trade at 13,660.

The Dow last week fell 0.5%, while the S&P 500 gave up 0.4%, with both indexes suffering their second straight weekly fall. The Nasdaq Composite advanced 0.3%, snapping a run of four consecutive weekly declines.

What’s driving the market?

Stocks edged higher Monday despite uncertainty around the next phase of the economic recovery, as businesses grapple with stressed supply chains, soaring consumer demand and climbing prices as the world reboots from the pandemic.

“With the market pretty much rangebound these past two months, stocks head into the final full week of the month trying to break a two-week bull-bear stalemate,” said Chris Larkin, managing director, trading and investing product, at E-Trade Financial, in emailed comments on Monday.

“Fed minutes last week seemed to have been shrugged off as the Fed continues its wait and see posture, which added wind beneath the tech sector’s wings,” Larkin said

Rising inflation pressures are getting the blame for heightened stock-market volatility after data earlier this month showed the consumer-price index rose a hotter-than-expected 4.2% year-over-year in April. That prompted fears the Fed could move earlier than anticipated to begin pulling back on its monetary policy accommodation.

Read: Inflation scare? the stocks that perform best — and worst — when prices rise

Most Fed officials have maintained that it remains too early to begin contemplating the withdrawal of monetary support.

Meanwhile, stocks last week largely echoed the price action of the previous week, slumping early before enjoying a late-week bounce, said Sam Stovall, chief investment strategist at CFRA.

“Since the market’s low on May 19 did not undercut the low from the prior week, however, it was viewed as a successful retest of that earlier low, indicating that the recent selloff had run its course and that a near-term rally was likely at hand,” Stovall said, in a note.

Talks continue around President Joe Biden’s infrastructure push. The White House on Friday trimmed the size of its proposal from $2.3 trillion to $1.7 trillion in an effort to win Republican support.

The effort failed to bear fruit with Senate Republicans so far, according to news reports, raising doubts about the prospects for a deal before a Memorial Day target. Democrats could attempt to move on their own if the stalemate continues, using budget reconciliation procedures.

Volatility in the cryptocurrency markets also remained in focus. Bitcoin extended a slump over the weekend to fall as much as 50% from its all-time high above $60,000. Bitcoin was up around 10% in recent action.

Read: ‘Where the crypto market goes from here is completely dependent on the stock market,’ says digital-asset tycoon Barry Silbert

Which companies are in focus?

  • Cabot Oil & Gas Corp.  and Cimarex Energy Co.  said Monday that they reached an agreement on an all-stock merger of equals in a deal with an enterprise value of about $17 billion. Cabot shares traded 5.4% lower, while Cimarex shares declined 6% lower.
  • Virgin Galactic Holdings Inc. on Saturday completed its first rocket-powered flight from New Mexico to the fringe of space in a manned shuttle. Shares jumped by over 18%.
  • Singular Genomics Systems Inc. the California-based biotech that leverages next-generation sequencing to build products for researchers, set terms of its initial public offering, in which it could be valued at up to $1.5 billion. The company is looking to raise up to $187 million, as it is offering 8.5 million shares at an IPO price of between $20 and $22 a share. The stock is expected to trade on the Nasdaq under the ticker symbol “OMIC.”
  • Norwegian Cruise Line Holdings Ltd. NCLH said Monday it will resume cruises to Alaska from Seattle starting Aug. 7. Its stock was up 2.8%.
  • Vivint Smart Home IncVVNT said Monday that Chief Executive Todd Pedersen will step down from his role, once a successor has been found. Pedersen, who also founded the company, will remain on the integrated smart home company’s board of directors. Shares were down 4.5%.

How are other assets faring?

  • The yield on the 10-year Treasury note was at 1.605%, down 2.5 basis points. Yields and bond prices move in opposite directions.
  • The ICE U.S. Dollar Index  a gauge of the currency against a basket of six major rivals, was off 0.1%.
  • Oil futures  rose, with West Texas Intermediate crude for July delivery up 1.8 cents, or 2.9%, at $65.42 a barrel on the New York Mercantile Exchange.
  • Gold futures  climbed to trade at $1,884.90, rising 0.4%.
  • The Stoxx Europe 600 index SXXP was trading up 0.1%, while London’s FTSE 100 UKX rose 0.5%.
  • Hong Kong’s Hang Seng Index HSI fell 0.2%, while the Shanghai Composite SHCOMP ended 0.3% higher and Japan’s Nikkei 225 NIK rose 0.2%.
Continue Reading

Related Posts