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Stocks close higher; Twitter soars on news of Musk stake

People walk past the New York Stock Exchange building in New York.
Stocks shook off a downbeat start to close higher Monday, as big gains by technology and communications companies helped offset losses elsewhere on Wall Street.
(Seth Wenig / Associated Press)
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Stocks shook off a downbeat start to close higher Monday, as big gains by technology and communications companies helped offset losses elsewhere on Wall Street.

The Standard & Poor’s 500 index rose 0.8% after having been down 0.2% in the early going. The Dow Jones industrial average gained 0.3% and the Nasdaq composite added 1.9%.

Twitter surged 27.1% for the biggest gain in the S&P 500 after the company disclosed that Tesla’s Elon Musk had taken a 9.2% stake in the social media platform. In recent weeks Musk has publicly questioned the company’s commitment to free speech.

The gains were a key factor in lifting the broader communications sector and keeping the S&P 500 in positive territory as nearly half the companies in the index fell.

The market’s latest moves follow three straight weekly gains by the S&P 500, even as investors grapple with uncertainties stemming from surging inflation, higher interest rates from the Federal Reserve and the economic fallout from the war in Ukraine.

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The S&P 500 rose 36.78 points to 4,582.64, the Dow gained 103.61 points to close at 34,921.88, and the tech-heavy Nasdaq rose 271.05 points to 14,532.55.

Smaller-company stocks also gained ground. The Russell 2000 index rose 4.33 points, or 0.2%, to 2,095.44.

After acquiring a 9% stake in Twitter, Elon Musk questioned free speech on the platform and asks whether it is undermining democracy.

Apple and other big technology stocks did the heavy lifting Monday, offsetting losses elsewhere. Tech companies, with their pricey stock values, tend to have more weight in pushing the market up or down. Apple rose 2.4% and Microsoft gained 1.8%.

Retailers and other companies that rely on consumer spending also helped lift the market. Amazon added 2.9% and Home Depot closed 1.2% higher. Tesla rose 5.6% after reporting over the weekend that first-quarter car shipments were stronger than analysts had expected despite the continued COVID-related shutdown of the company’s Shanghai factory.

Investors continue to monitor the conflict in Ukraine, which could lead to even stricter economic sanctions against Russia now that details are emerging of what appear to be deliberate killings of civilians.

The European Union’s foreign policy chief, Josep Borrell, joined a growing chorus of international criticism of the alleged atrocities, saying the 27-country bloc “will advance, as a matter of urgency, work on further sanctions against Russia.”

Russia’s invasion of Ukraine has elevated concerns about rising inflation and the effect on global economic growth. Prices for food, clothing and other goods had already been rising, and the war has made for even more volatile energy prices.

The price of U.S. benchmark crude oil rose 4%, and Brent crude, the international standard, rose 3%. Prices are up roughly 40% globally, which has put pressure on costs for gasoline and other goods.

Despite high gas prices, a vehicle shortage is putting the brakes on what should be an EV boom and pushing buyers to search for workarounds.

Bond yields mostly gained ground. The yield on the 10-year Treasury rose to 2.41% from 2.38% late Friday. The yield on the two-year Treasury dipped to 2.41% after having moved higher earlier in the day.

The two-year yield has been hovering at times above the 10-year yield, which is a potentially ominous sign.

Such a flip of the usual relationship between two- and 10-year yields has preceded many recessions in the past, though it hasn’t been a perfect predictor. Some market watchers caution the signal may be less accurate this time because of distortions in yields caused by extraordinary measures by the Federal Reserve and other central banks to keep interest rates low.

Bond yields have been climbing all year as Wall Street prepares for higher interest rates. The Federal Reserve has already raised its key overnight rate once, the first such increase since 2018. The central bank is expected to continue raising rates throughout 2022 to help counter the effects of rising inflation.

The Fed is due Wednesday to release minutes from its last meeting.

Markets in Europe closed higher. Asian markets also rose, with Hong Kong’s Hang Seng index jumping 2.1% after regulators in Beijing said they plan to revise rules regarding access of overseas regulators to full audits of companies that have shares listed in overseas markets.

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