Shares gained on Monday, hitting new all-time highs after last week’s volatility, as investors anticipated a key Federal Reserve event later this week.
The S&P 500 advanced and hit a new all-time intraday high. Positive sentiment has spread to other risky assets, and oil prices have also rebounded from recent declines. West Texas Intermediate Crude Oil futures (CL = F) topped $ 64 a barrel, and Brent crude (BZ = F) jumped above $ 67 a barrel after suffering its longest streak of losses since early 2018 last week.
The Dow Jones rose as stocks of Chevron (CVX) and Caterpillar outperformed. Shares of Pfizer (PFE) surged after the pharmaceutical company announced it would acquire cancer drug maker Trillium Therapeutics (TRIL) for $ 2.3 billion. Separately, the United States Food and Drug Administration Pfizer’s best-selling COVID-19 vaccine fully approved months of use after emergency authorization.
Stocks came under pressure late last week after the minutes of the July Federal Open Market Committee meeting reported that “most” Fed participants believed the economy would have gone downhill. recovered enough to justify the start of a reduction in asset purchases by the end of this year. The S&P 500 posted its first weekly decline in three weeks, while closing Friday’s session higher. Central bank officials are expected to hold their annual Jackson Hole symposium this week starting Thursday, which could serve as a forum for more remarks on the size and scope of the Fed’s Fed cuts plans.
A host of new benefits and economic data have also been released. Overall, corporate earnings have been exceptionally strong, with nearly 90% of S&P 500 companies beating consensus earnings per share estimates, according to FactSet. This came even as concerns about the spread of the Delta variant resurfaced and supply chain issues and material and labor shortages remained.
“I think we’re definitely not going to get the kind of fiscal stimulus we’ve had over the last year and a half, or the monetary stimulus. So I think overall the market is handling all of this remarkably well. “Ed Yardeni, president and chief investment officer of Yardeni Research, told Yahoo Finance. “The perception is that the Federal Reserve is now seriously heading for a cut because the economy is doing well. this probably keeps the bond yield low and weakens oil. “
10:23 a.m.ET: US service sector activity cooled to 8-month low in August amid Delta variant: IHS Markit
Activity in the services and manufacturing sectors in the United States slowed in August as the rapid spread of the Delta variant dampened overall growth.
IHS Markit’s flash service business activity index in August fell to 55.2 from 59.9 in July. This is a steeper drop than the expected drop to 59.2, according to Bloomberg data, and brought the index back to its lowest level in eight months. Readings above the neutral level of 50.0 indicate expansion in a sector.
The manufacturing activity index also fell more than expected to 61.2 from 63.4 in July. This marked a four-month low and was below the 62.0 expected by economists.
“The expansion slowed down sharply again in August, as the spread of the Delta variant led to weakening demand growth, especially for consumer services, and further frustrated efforts by businesses to meet the needs of consumers. existing sales, ”Chris Williamson, chief economist at IHS. Markit, said in a press release.
“Not only did supply chain delays hit a new investigative record, but the August investigation revealed growing frustrations with hiring,” he added. or existing workers have changed jobs. “
10:02 am ET: Existing home sales unexpectedly surged in July, marking consecutive monthly gain
According to the National Association of Realtors monthly report, used home sales rose 2.0% in July, marking a second consecutive monthly gain. Consensus economists were looking for a 0.5% drop in existing home sales for the month, according to Bloomberg estimates.
In June, sales of existing homes were up 1.6%. July’s advance pushed existing home sales to a seasonally adjusted annual rate of 5.99 million, the highest level since March.
Home prices continued to climb in July as tight inventories and high demand continued to weigh on affordability. The median price of existing homes was $ 359,900, a 17.8% jump from the same month last year.
9:31 am ET: Stocks gain, recovering from last week’s losses
Here’s where the markets were trading right after the opening bell Monday morning:
S&P 500 (^ GSPC): +19.22 (+ 0.43%) to 4,460.89
Dow (^ DJI): +172.05 (+ 0.49%) to 35,292.13
Nasdaq (^ IXIC): +65.23 (+ 0.44%) to 14,782.66
Raw (CL = F): + $ 2.52 (+ 4.06%) to $ 64.66 per barrel
Gold (CG = F): + $ 22.50 (+ 1.26%) to $ 1,806.50 per ounce
10-year cash flow (^ TNX): -0.2 bps for a yield of 1.258%
Monday at 7:23 a.m.ET: Stock futures indicate higher open:
Here’s where the markets were trading before the opening bell:
S&P 500 Futures Contracts (ES = F): +14.5 points (+ 0.33%) to 4,451.50
Dow Futures (YM = F): +144.00 points (+ 0.41%) at 35,202.00
Nasdaq Futures (NQ = F): +43.75 points (+ 0.29%) to 15,130.50
Raw (CL = F): + $ 1.75 (+ 2.82%) to $ 63.89 per barrel
Gold (CG = F): + $ 8.80 (+ 0.49%) to $ 1,792.80 per ounce
10-year cash flow (^ TNX): +1.2 bps for a yield of 1.272%
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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