Strong gains for tech stocks push up Wall Street


Stocks rose again on Monday, as Wall Street extended its gains from last week’s rally, the market’s best in three months.The S&P 500 rose 1.6%, as equity markets around the world strengthened. Big Tech stocks, including Apple and Microsoft, fueled much of the gains. Their businesses have proven to be virtually unresponsive to the pandemic, unlike businesses that would benefit from a stronger economy.

The latest upward push in the market came as Wall Street seemed largely to ignore the latest signs that Democrats and Republicans are no closer to reaching agreement on more aid to the still hampered economy by the pandemic. Over the weekend, Democratic House Speaker Nancy Pelosi criticized the Trump administration’s latest stimulus package as “one step forward, two steps back,” while fellow Republican the president called it too expensive.

Investors may be betting Congress will come up with a more generous aid bill after the election, if Democrats regain a majority in Congress, as some polls suggest.

“The market is expressing some comfort with Democrats taking the White House and the Senate if that means there will be more stimulus,” said Willie Delwiche, investment strategist at Baird. “But the reality is that it will be several months before anything is adopted. This raises a question in my mind whether or not some of this is too much, too early in terms of the market anticipating the stimulus at this point.

The S&P 500 rose 57.09 points to 3,534.22. The benchmark is on a winning four-day streak and now sits at 1.4% of its all-time high on September 2. The Dow Jones Industrial Average climbed 250.62 points, or 0.9%, to 28,837.52. The Nasdaq composite, heavily weighted by technology stocks, gained 296.32 points, or 2.6%, to 11,876.26.

Apple climbed 6.4% and alone accounted for a quarter of the S&P 500’s rise. The iPhone maker was also the index’s biggest winner. Amazon rose 4.8%. Both companies have events coming up this week, with Apple expected to unveil its latest batch of iPhones on Tuesday and Amazon having its Prime Day on Tuesday and Wednesday.

Microsoft also closed higher, up 2.6%, Facebook added 4.3% and Google’s parent company gained 3.6%.

The Russell 2000 small-cap index, which tends to move more with expectations of a strong economy than high-tech companies, posted more modest gains than the rest of the market. The index recovered 11.51 points, or 0.7%, to 1,649.05.

Monday’s gains come on top of last week’s 3.8% rally for the S&P 500, which came amid a dizzying 360-degree spin on Congress and White House expectations to be able to provide more aid to the economy.

President Donald Trump said earlier this week he would end stimulus talks, even though economists and the Federal Reserve Chairman believe the economic recovery likely needs it. He then backed a more limited set of programs before berating negotiators at the end of the week for “Go Big!” His administration unveiled its latest augmented proposal to House Democrats, valued at around $ 1.8 trillion, but it was rejected by Democrats over the weekend.

Investors have fought for more stimulus since the expiry of additional unemployment benefits for laid-off workers and other economic supports approved by Congress earlier this year. Even though Washington cannot deliver the aid quickly, some investors have set their expectations for its arrival in 2021.

The increasing number of polls for Democrats increases the chances of a sweep of the White House, Senate and House of Representatives. If that were to happen, investors say it would also increase the likelihood of a big post-election stimulus package. This could offset the slowdown in corporate profits that investors expect a Democrat-controlled Washington to create through higher taxes and tighter regulations.

This week also marks the start of the earnings season for large U.S. companies, where CEOs will tell investors how they fared from July through September. Analysts are forecasting another quarter of weaker earnings, with S&P 500 earnings expected to be down 20.5% from a year earlier, according to FactSet.

But it’s not as bad as analysts predicted a few months ago, and it’s not as bad as the 31.6% drop that S&P 500 companies reported for the spring quarter. . As widespread lockdowns eased across the country, businesses may have felt some growing momentum.

This week will feature earnings reports from many of the nation’s largest banks, and their behavior “may give a clearer picture of how far we’ve come in terms of economic recovery,” said Chris Larkin, Managing Director of E-Trade Financial . .

In European markets, indices rose in France and Germany but fell in Great Britain. Asian markets generally closed higher, except in Japan, where they fell slightly.

Trading in US bonds was closed for a public holiday.


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