Wall Street rises to add to last week’s gains
U.S. stocks rose Monday and added to their gains from last week, as technology companies once again led the way.
The Standard & Poor’s 500 index rose 52.95 points, or 1%, to 5,180.74. The Dow Jones industrial average added 176.59 points, or 0.5%, to close at 38,852.27, and the Nasdaq composite jumped 192.92 points, or 1.2%, to 16,349.25.
Tech stocks were at the forefront, with familiar ringleaders Nvidia and Super Micro Computer again pulling the market higher. They’ve had a couple of hiccups recently, but a frenzy around artificial intelligence technology has Nvidia up 86.1% for the year after Monday’s 3.8% gain. Super Micro is up 192.1% after its gain of 6.1%.
Vistra, an electricity and power generation company, rose 2.1% after investors learned it will join the widely tracked S&P 500 index Wednesday. Freshpet jumped 10.4% after reporting better results than expected, largely because it sold 30% more food for cats and dogs, and Berkshire Hathaway added 1% after Warren Buffett’s company reported its latest quarterly results over the weekend.
They helped to offset a 9.7% slide for Spirit Airlines, which reported a slightly worse loss than expected. The carrier said it’s facing increased competition in many of its markets, particularly between the United States and Latin America.
Apple slipped 0.9% after Berkshire Hathaway revealed it had pared its stake in the tech giant.
The U.S. stock market has been swinging sharply since setting a record at the end of March. It sunk for weeks on fears that stubbornly high inflation would prevent or at least delay the Federal Reserve from delivering the cuts to interest rates that Wall Street craves.
But markets found a burst of optimism at the end of last week after a cooler-than-expected jobs report. It suggested that the U.S. economy could nail the tightrope walk of staying strong enough to avoid a bad recession, but not so firm that it puts too much upward pressure on inflation.
Goldman Sachs economist David Mericle said he still expects two rate cuts this year, in July and November, after Fed Chair Jerome H. Powell “pushed back strongly against the possibility of further rate hikes” at his news conference last week.
This week won’t include such highly anticipated events as last week’s Fed meeting or monthly jobs report. The bulk of companies in the S&P 500 have reported their results for the first three months of the year, with more than three-quarters of them topping profit expectations, according to FactSet.
But several more big names are still on the way this week, including Walt Disney Co. and Uber Technologies.
In the bond market, which has been dictating much of the action in the stock market recently, Treasury yields held mostly steady.
The yield on the 10-year Treasury edged down to 4.49%, from 4.50% late Friday. The two-year Treasury yield, which more closely tracks expectations for the Fed, was also relatively little changed.
Traders are betting on a nearly 89% chance that the Fed will cut its main interest rate at least once before the end of the year, according to data from CME Group. That’s up from from an 81.6% probability seen a week earlier. Lower rates would help ease pressure on the economy and financial system.
In stock markets abroad, several exchanges were closed for holidays. Indexes rose relatively modestly in France and Hong Kong. They jumped 1% in Germany and 1.2% in Shanghai.
Corporate profit reports have been better than expected not just in the U.S. but also in Europe and Japan, according to strategists at Deutsche Bank. Global earnings growth is on track for a second straight quarter of growth after four consecutive declines.
Choe writes for the Associated Press
