A sign for a Wall Street building is shown, Wednesday, May 19, 2021 in New York. Stocks are opening broadly higher on Wall Street, starting the week on a positive note following two straight weeks of losses for most major indexes. The S&P 500 was up 0.6% in the early going Monday, May 24. (AP Photo/Mark Lennihan)
By Damian J. Troise and Alex Veiga
Stocks closed higher on Wall Street Monday, and the broad rally helped the S&P 500 claw back more than half of its losses over the past two weeks.
The benchmark index rose 1%, led by solid gains in technology and communication companies such as Microsoft, Google's parent company, Facebook and Twitter. A variety of companies that rely on direct consumer spending also made solid gains. Sectors that are viewed as safer investments, like utilities, lagged the broader market. Bond yields fell.
The rally marks a reversal from the market's recent trajectory. The S&P 500 followed up an all-time high close on May 7 with two straight weekly declines. Investors have been watching for potential signs of inflation as the economic recovery continues in the waning days of the U.S. coronavirus pandemic.
Rob Haworth, senior investment strategy director at U.S. Bank Wealth Management, said the decline in bond yields was spurring the rally, especially in technology and communication services stocks.
“You have inflation expectations coming out of the bond market and that's allowing some lift” to the stocks, Haworth said.
The S&P 500 index rose 41.19 points to 4,197.05. The index is now on track for a 0.4% monthly gain. The Dow Jones Industrial Average added 186.14 points, or 0.5%, to 34,393.98. The tech-heavy Nasdaq Composite gained 190.18 points, or 1.4%, to 13,661.17.
Smaller company stocks also notched gains. The Russell 2000 index picked up 12.07 points, or 0.5%, to 2,227.34.
The current earnings reporting season is near its end, and companies have been reporting strong results for the first quarter. That has helped reaffirm Wall Street's view that the economic recovery is solid. It has also helped to justify some of the pricey stock values in several sectors, especially technology. Investors will get results from Dell and Salesforce.com this week, among a few others.
“Now we realize there's still some spectacular earnings growth and fundamentals coming from tech and communications and growth stocks in general,” said Ryan Detrick, chief market strategist for LPL Financial.
Technology stocks accounted for a big share of the upward move in the market Monday, with semiconductor companies among the big gainers. Nvidia rose 4.1%, while Micron Technology added 2.7%. Among communication stocks, Facebook gained 2.7% and Twitter jumped 4.8%
There are only a handful of economic reports this week, including monthly data on new home sales and prices. On Friday, investors will get another reading on inflation in the form of the Commerce Department's personal consumption and expenditures index. "Core PCE," as it is known, is the preferred way Federal Reserve policymakers choose to measure inflation in the U.S. instead of the more widely known consumer price index that's reported earlier in the month.
Economists surveyed by FactSet expect Core PCE to be up 3% from a year ago, which would be above the Federal Reserve's targeted level for inflation.
“We all expect inflation to be going up because of year-over-year comparisons," Detrick said. “The number will be higher, but the question is will it be hotter than expected.”
The yield on the 10-year Treasury note fell to 1.60% from 1.63% Friday.
Digital currencies like Bitcoin were volatile once again after plummeting over the last two weeks. Bitcoin climbed 17.6% to around $39,539, according to Coindesk. It was worth nearly $65,000 a month ago.
Virgin Galactic jumped 27.6% after the company made its first rocket-powered flight from New Mexico to the fringe of space in a manned shuttle over the weekend.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
Starbucks’ AI barista aims to speed service and improve experience. Nick Lichtenberg, Fortune Business Editor, explains its impact on workers and customers.
