U.S. Stocks Seeing Further Upside After Early Advance
Stocks moved mostly higher early in the session on Monday and continue to turn in a strong performance in afternoon trading. The major averages have all moved notably higher after ending last Friday’s trading mixed.
In recent trading, the Dow and S&P 500 have reached new highs for the session. The Dow is up 485.53 points or 1.5 percent at 32,903.12, the S&P 500 is up 43.87 points or 1.1 percent at 4,161.24 and the Nasdaq is up 124.74 points or 1.0 percent at 12,767.75.
The rebound on Wall Street is partly due to bargain hunting, with traders picking up stocks at reduced levels following last week’s sell-off.
The Dow slumped to its lowest closing level in seven months last Friday, while the S&P 500 slid to a new five-month closing low.
The steep drop seen last week reflected ongoing concerns about the outlook for interest rates as well as worries about the conflict in the Middle East.
The advance by the Dow partly reflects a strong gain by shares of McDonald’s (MCD), with the fast food giant jumping by 2.4 percent after reporting third quarter results that exceeded analyst estimates on both the top and bottom lines.
Meanwhile, traders continue to look ahead to the Federal Reserve’s highly anticipated monetary policy announcement on Wednesday.
With the Fed widely expected to leave interest rates unchanged, traders will pay close attention to the accompanying statement for clues about the potential for further rate hikes.
Following the Fed announcement, the Labor Department’s closely watched monthly employment report is likely to move into the spotlight later in the week.
Retail stocks have moved sharply higher over the course of the session, driving the Dow Jones U.S. Retail Index up by 2.1 percent. The index is climbing further off the five-month closing low set last Thursday.
Considerable strength has also emerged among transportation stocks, with the Dow Jones Transportation Average climbing by 1.7 percent after ending last Friday’s trading at its lowest closing level in six months.
Telecom stocks are also turning in a strong performance on the day, as reflected by the 1.7 percent gain being posted by the NYSE Arca North American Telecom Index.
Software, banking and pharmaceutical stocks are also seeing significant strength, while networking stocks have shown a substantial move to the downside.
The NYSE Arca Networking Index has plunged by 3.2 percent, with CommScope Holding (COMM) leading the way lower after warning of weaker than expected third quarter results and lowering its full-year guidance.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan’s Nikkei 225 Index slumped by 1.0 percent, while China’s Shanghai Composite Index inched up by 0.1 percent.
Meanwhile, the major European markets all moved to the upside on the day. While the U.K.’s FTSE 100 Index climbed 0.5 percent, the French CAC 40 Index rose by 0.4 percent and the German DAX Index edged up by 0.2 percent.
In the bond market, treasuries have moved lower after ending the previous session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.7 basis points at 4.892 percent.
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