Wall Street rises to add to last week's gains

Wall Street rises to add to last week’s gains

/ 07:58 AM May 07, 2024

NEW YORK — U.S. stocks rose Monday and added to their gains from last week, as technology companies once again led the way.

The S&P 500 rose 52.95, or 1 percent, to 5,180.74. The Dow Jones Industrial Average added 176.59, or 0.5 percent, to 38,852.27, and the Nasdaq composite jumped 192.92, or 1.2 percent, 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 percent for the year so far after Monday’s 3.8 percent gain. Super Micro is up 192.1 percent after its gain of 6.1 percent.


Vistra, an electricity and power generation company, rose 2.1 percent after investors learned it will join the widely tracked S&P 500 index on Wednesday. Freshpet jumped 10.4 percent after reporting better results than expected in large part because it sold 30 percent 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 percent 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 percent after Berkshire Hathaway revealed it had pared its stake in the tech giant.

Burst of optimism

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.

READ: Wall St rebounds following its slide as Big Tech takes the reins again

But markets found a burst of optimism at the end of last week following a cooler-than-expected jobs report. It suggested 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 cuts to rates this year, in July and November, after Fed Chair Jerome Powell “pushed back strongly against the possibility of further rate hikes” at his press conference last week.


READ: Powell sticks with Fed’s cautious rate-cut strategy

This upcoming 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 also already 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 The 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.

Interest rate cut bets

The yield on the 10-year Treasury edged down to 4.49 percent, from 4.50 percent 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 percent 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 an 81.6 percent probability seen a week earlier. Lower rates would help ease the 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 percent in Germany and 1.2 percent in Shanghai.

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Corporate profit reports have been better than expected not just in the United States 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 following four consecutive declines.

TAGS: tech stocks, Wall Street

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