Nasdaq Reaches Record Closing High On Continued Strength Among Tech Stocks
(RTTNews) - Stocks moved mostly higher during trading on Monday, with strength among tech stocks once again contributing to an advance on Wall Street. The tech-heavy Nasdaq jumped to a new record closing high, while the S&P 500 ended the session at its best closing level in well over five months.
The major averages all closed firmly in positive territory, although the Nasdaq outperformed its counterparts. While the Nasdaq surged up 157.52 points or 1.5 percent to 10,902.80, the Dow advanced 236.08 or 0.9 percent to 26,664.40 and the S&P 500 climbed 23.49 points or 0.7 percent to 3,294.61.
Technology stocks saw continued strength on the day after moving sharply higher last Friday on largely upbeat earnings news.
Shares of Microsoft (MSFT) soared by 5.6 percent to a new record closing high after the software giant confirmed it is in talks to acquire Chinese-owned video-sharing app TikTok.
The statement from Microsoft came just days after President Donald Trump revealed plans to ban TikTok in the U.S. due to national security concerns.
Tech giant Apple (AAPL) also extended the rally seen in the previous session, jumping by 2.5 percent to a new record closing high.
Adding to the positive sentiment on Wall Street, the Institute for Supply Management released a report showing a bigger than expected acceleration in the pace of growth in U.S. manufacturing activity in the month of July.
The ISM said its purchasing managers index rose to 54.2 in July from 52.6 in June, with a reading above 50 indicating growth in manufacturing activity. Economists had expected the index to inch up to 53.6.
"In July, manufacturing continued its recovery after the disruption caused by the coronavirus (COVID-19) pandemic," said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.
He added, "Panel sentiment was generally optimistic (two positive comments for every one cautious comment), continuing a trend from June."
With the bigger than expected increase, the purchasing managers index reached its highest level of expansion since March of 2019.
The better than expected reading on U.S. manufacturing activity came on the heels of upbeat readings on manufacturing in China and Europe.
With Microsoft helping lead the way higher, software stocks showed a substantial move to the upside on the day. Reflecting the strength in the sector, the Dow Jones U.S. Software Index surged up by 3.8 percent to a record closing high.
Significant strength was also visible among biotechnology stocks, as reflected by the 2.7 spike by the NYSE Arca Biotechnology Index. The index rebounded after ending the previous session at its lowest closing level in a month.
Oil service stocks also moved sharply higher over the course of the session, driving the Philadelphia Oil Service Index up by 2.1 percent.
The rally by oil service stocks came amid a notable increase by the price of crude oil, with crude for September delivery climbing $0.74 to $41.01 a barrel.
Steel, semiconductor and housing stocks also showed strong moves to the upside on the day, while gold and commercial real estate stocks bucked the uptrend.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index surged up by 2.2 percent, while Hong Kong's Hang Seng Index fell by 0.6 percent.
Meanwhile, the major European moved sharply higher on the day. While the German DAX Index soared by 2.7 percent, the U.K.'s FTSE 100 Index spiked by 2.3 percent and the French CAC 40 Index jumped by 1.9 percent.
In the bond market, treasuries gave back ground after trending higher in recent sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.7 basis points to 0.563 percent.
Earnings news may be in focus on Tuesday, as a Commerce Department report on factory orders in the month of June is likely to be viewed as old news.
Traders are also likely to keep an eye on developments in Washington, as lawmakers continue to negotiate over a new coronavirus relief bill.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.