Stocks moved mostly higher early in the session on Monday and continue to turn in a strong performance in afternoon trading. The major averages are adding to the slim gains posted in the previous session.
Currently, the major averages all remain positive, with the tech-heavy Nasdaq outperforming its counterparts. The Nasdaq is up 142.19 points or 1.0 percent at 13,903.71, the S&P 500 is up 29.77 points or 0.7 percent at 4,487.26 and the Dow is up 112.83 points or 0.3 percent at 34,689.42.
The strength on Wall Street partly reflects easing concerns about the outlook for interest rates after a report from the Wall Street Journal suggested a shift in Federal Reserve officials’ stance on rates.
Fed insider Nick Timiraos said the central bank is likely to pause its recent series of rate hikes next week then take a “harder look at whether more are needed.”
While Timiraos said some Fed officials to still prefer to err on the side of raising rates too much, other see risks as more balanced and worry about unnecessarily causing a downturn or triggering financial turmoil.
CME Group’s FedWatch Tool is currently indicating a 93.0 chance the Fed will leave interest rates unchanged next week.
Later this week, the Labor Department’s report on consumer price inflation in August could have a significant impact on the outlook for rates.
The tech-heavy Nasdaq has received a boost from a surge by shares of Tesla (TSLA), with the electric car maker spiking by 9.7 percent after Morgan Stanley upgraded its rating on the company’s stock to Overweight from Equal-Weight.
Chipmaker Qualcomm (QCOM) has also moved sharply higher after announcing an agreement with Apple (AAPL) to supply Snapdragon 5G Modem-RF Systems for smartphone launches in 2024, 2025 and 2026.
Additionally, shares of Hostess Brands (TWNK) have soared after the Twinkie maker agreed to be acquired by J.M. Smucker (SJM) in a cash and stock transaction valued at approximately $5.6 billion.
Airline stocks have moved sharply higher over the course of the session, with the NYSE Arca Airline Index soaring by 2.0 percent. The index continues to regain ground after ending last Thursday’s trading at a four-month closing low.
Significant strength also remains visible among gold stocks, as reflected by the 1.6 percent gain
being posted by the NYSE Arca Gold Bugs Index. The strength in the sector comes amid a modest increase by the price of gold.
Tobacco, housing and retail stocks are also seeing notable strength in afternoon trading, while oil and natural gas stocks have moved to the downside on the day.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan’s Nikkei 225 Index fell by 0.4 percent, while China’s Shanghai Composite Index advanced by 0.8 percent.
Meanwhile, the major European markets all moved to the upside on the day. While the U.K.’s FTSE 100 Index rose by 0. percent, the German DAX Index and the French CAC 40 Index climbed by 0.4 percent and 0.5 percent, respectively.
In the bond market, treasuries have moved lower after ending the previous session nearly unchanged. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.8 basis points at 4.286 percent.
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