NEW YORK - Wall Street’s three major US stock averages advanced on Monday with Nasdaq leading gains as heavyweight Microsoft rallied after it hired prominent artificial intelligence executives, and lower Treasury yields also provided some support.
The S&P 500 information technology sub-index, up 1.6 per cent, was the top gainer among the S&P 500‘s 11 major sectors, getting its biggest boost from Microsoft’s shares which touched a record high and were last up 2 per cent.
Microsoft CEO Satya Nadella said Sam Altman, who headed OpenAI until he was ousted late last week, was set to join Microsoft to lead a new advanced AI research team. Microsoft will also take on Greg Brockman, another OpenAI cofounder, as well as other researchers.
The news set a positive tone for the technology sector, which was also lifted by other megacap stocks, including Apple and Nvidia.
Investors cheered a better-than-expected earnings season and the ongoing trend of falling Treasury yields, said Bruce Zaro, managing director at Granite Wealth Management in Providence, Rhode Island.
“The market likes what it sees in the behaving bond market. It likes what it sees in earnings reports and it’s in the holiday mood,” said Zaro, noting that investors may be preparing for a rally which often comes with the year-end holiday season.
The Dow Jones Industrial Average rose 191.4 points, or 0.55 per cent, to 35,138.68, the S&P 500 gained 31.6 points, or 0.70 per cent, at 4,545.62 and the Nasdaq Composite added 148.62 points, or 1.05 per cent, at 14,274.10.
The defensive utilities index was the S&P 500‘s biggest sector decliner, down 0.4 per cent. Of the 11 sectors, consumer stables was the next weakest, down 0.02 per cent.
Wall Street’s main indexes have staged a rebound so far in November, after about three months of weakness as evidence of easing US inflation supported bets that the Federal Reserve was done raising interest rates. The benchmark S&P 500 was also closing back in on its year-to-date high reached in July, just a little over 1 per cent below the milestone.
Traders have nearly fully priced in the likelihood that the Fed will keep interest rates unchanged in December, and have started pricing in rate cuts as soon as March, according to the CME Group’s FedWatch tool.
While trading volume is often thin ahead of Thursday’s US Thanksgiving holiday, investors will have at least two potential catalysts to monitor.
One is the quarterly report, due out on Tuesday from chip designer Nvidia, whose stock is seen as one of the best ways to bet on the emerging artificial intelligence industry. Nvidia’s results will wrap up the earnings season for the so-called “Magnificent Seven” group of megacap companies.
Also on Tuesday, the Fed is expected to issue minutes of its November meeting, which may provide clues on the direction of US interest rates.
Capping off the week, foot traffic at stores on Black Friday could provide a gauge on the state of US consumer spending.
Among individual movers, Bristol Myers Squibb fell 4% as Germany’s Bayer on Sunday stopped a late-stage trial testing a new anti-clotting drug, hurting investor confidence in all firms developing similar class of drugs.
Boeing added 4% as Deutsche Bank upgraded the aerospace company to “buy” from “hold” and raised its price target to $270 from $204.
Advancing issues outnumbered decliners on the NYSE by a 2.03-to-1 ratio; on Nasdaq, a 1.63-to-1 ratio favored advancers.
The S&P 500 posted 25 new 52-week highs and one new low; the Nasdaq Composite recorded 70 new highs and 78 new lows. REUTERS
