Wall Street Closes Higher 08/03 15:58
Stocks started August with more gains, and a worldwide rally on Monday sent
Wall Street back to where it was just a couple days after it set its record
earlier this year
NEW YORK (AP) -- Stocks started August with more gains, and a worldwide
rally on Monday sent Wall Street back to where it was just a couple days after
it set its record earlier this year.
The S&P 500 tacked 0.7% more onto its four-month winning streak, and Big
Tech once again led the way. The index rose 23.49 points to 3,294.61 to get
within 3% of its record for the first time since February.
The Dow Jones Industrial Average rose 236.08 points, or 0.9%, to 26,664.40.
The gains for tech stocks, particularly Microsoft and Apple, pushed the Nasdaq
composite up 157.52, or 1.5%, to 10,902.80, another record.
Helping to launch markets higher were reports showing manufacturing activity
strengthened across Europe in July by more than economists expected. The gains
built higher after a separate report showed U.S. manufacturing growth
accelerated last month at a faster pace than economists expected.
The data added to evidence that the global economy halted its freefall from
earlier this year, at least temporarily. Earlier on Monday, a private survey
showed China's manufacturing activity also grew at a faster rate in July than
Such budding improvements have helped the S&P 500 nearly erase its
pandemic-caused plunge, which had reached nearly 34% at one point. So have
massive amounts of aid for the economy from the Federal Reserve.
Still, "there is clear confusion among investors," said Mark Hackett, chief
of investment research at Nationwide. Even though the stock market is
indicating a steady recovery, he said big moves in the foreign-currency and
gold markets are "suggesting greater disruption."
In Washington, meanwhile, slow, grinding negotiations on another huge relief
effort for the U.S. economy are ongoing. Both the Trump administration
negotiating team and top Capitol Hill Democrats reported progress over the
weekend, though differences remain.
The discussions have taken on more urgency because $600 in weekly benefits
for laid-off workers from the federal government have expired, just as the
number of layoffs ticks up across the country amid a resurgence of coronavirus
counts and business restrictions.
The continued spread of the coronavirus is raising worries that the economy
could backslide again and snuff out the budding improvements it's shown. The
shakeout from the pandemic took down two more big retailers over the weekend,
with Lord & Taylor and the owner of Men's Wearhouse both filing for bankruptcy
protection on Sunday.
Through the pandemic, though, Big Tech has remained almost immune to such
concerns on expectations that it can continue to grow.
Microsoft jumped 5.6% Monday after it confirmed that it's in talks to buy
the U.S. arm of TikTok, a Chinese-owned video app that is very popular but has
also drawn the White House's scrutiny. Microsoft said its CEO, Satya Nadella,
has talked with President Donald Trump about it, and the tech giant expects the
talks with TikTok to end no later than Sept. 15, either with a deal or not.
Apple added 2.5%, piling more gains onto its 10.5% rise Friday following a
blowout report showing that its profits during the spring easily topped Wall
"Earnings from tech companies were great, so we have the all-clear to buy
the sector," said Jason Brady, CEO at Thornburg Investment Management. "We also
got the all-clear from the Fed that money will stay cheap --- real interest
rates will stay low --- and there is zero appetite for considering the costs of
Across the market, corporate profits have come in for the spring that
weren't quite as bad as analysts were expecting. Roughly two-thirds of the way
into earnings season, 84% of S&P 500 companies have reported stronger results
than expected, according to FactSet. If it stays at that level, it would be the
highest since FactSet's records began in 2008.
Microsoft and Apple are also the two biggest in the U.S. stock market, which
gives their movements huge sway over indexes. The pair alone accounted for most
of the S&P 500's gain.
Health care stocks were also strong, with Varian Medical surging 22% for the
biggest gain in the S&P 500. Germany-based Siemens Healthineers said it will
buy the cancer therapy and research company in a deal worth roughly $16.4
Germany's DAX stock index returned 2.7% following the strong reports on
European manufacturing. France's CAC 40 rose 1.9%, and the FTSE 100 in London
In Asia, Japan's Nikkei 225 jumped 2.2%, South Korea's Kospi edged up 0.1%
and the Hang Seng in Hong Kong slipped 0.6%. Stocks in Shanghai rose 1.8%
The yield on the 10-year Treasury rose to 0.55% from 0.53% late Friday.
Benchmark U.S. crude rose 1.8% to settle at $41.01 per barrel. Brent crude,
the international standard, climbed 1.4% to $44.15 per barrel.