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Wall Street meets at the back of major technology banks

  • JPMorgan Chase’s positive interest income prospects increase banks
  • Broadcom shares are falling on potential VMware purchases
  • Indexes up: Dow 1.98%, S&P 1.86%, Nasdaq 1.59%

NEW YORK, May 23 (Reuters) – US equities ended higher on Monday as a rise in banks and a boom in market-leading technology stocks supported a broad-based rally following Wall Street’s longest series of weekly declines since the dotcom bust more than 20 years ago.

All three major US stock indices rose between 1.6% and 2.0%, with the sharpest increase from recurring megacap technology stocks Apple Inc (AAPL.O) and Microsoft Corp (MSFT.O).

Interest rate sensitive banks (.SPXBK) rose 5.1% after the largest US lender, JPMorgan Chase & Co (JPM.N) raised its interest income for the current year. read more

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JPMorgan Chase’s stock rose 6.2 percent.

“It feels like a relief rally more than a fundamental change in investor sentiment,” said Oliver Pursche, senior vice president at Wealthspire Advisors, in New York. “Investors as a whole feel that there is another shoe to drop, and they are probably right in the short term.”

On Friday, the S&P 500 closed 18.7% below the record high of 3 January. If the benchmark closes 20% or more below this record, it will confirm that it has been in a bear market since then.

In recent weeks, markets have been plagued by concerns about persistently high inflation and aggressive attempts by the Federal Reserve to curb it while the global economy tackles the fallout from Russia’s invasion of Ukraine.

“Today, it seems that the market is less afraid of the inflation factor and that the Fed can orchestrate a soft landing, so to speak,” said Chuck Carlson, CEO of Horizon Investment Services in Hammond, Indiana.

But “the skew is still to the downside,” Carlson added.

The Dow Jones Industrial Average (.DJI) rose 618.34 points, or 1.98%, to 31,880.24, the S&P 500 (.SPX) rose 72.39 points, or 1.86%, to 3,973.75 and Nasdaq Composite added (6.80IC). 1.59% to 11,535.28.

The Fed will give investors a hint about its state of mind on Wednesday, when it releases minutes from its last political meeting. FEDWATCH

Economic indicators this week may provide further support for the notion that inflation peaked in March, showing whether high prices have hurt consumers’ purchasing power.

All 11 major sectors in the S&P 500 ended the session green, with finance (.SPSY) having the largest percentage gain, with an increase of 3.2%

The reporting season for the first quarter is almost over, with 474 companies in the S&P 500 posting results. Of these, 78% beat expectations, according to Refinitiv.

Looking ahead, pre-announcements for the current quarter are generally pessimistic, with 59 negative estimates and 32 positive, compared with 37 negative and 52 positive per Refinitive for the previous year.

Shares of VMWare Inc (VMW.N) rose 24.8% after reports over the weekend that chipmaker Broadcom Inc (AVGO.O) was in talks to buy the cloud service provider. Broadcom fell 3.1 percent. read more

US-listed shares in the Chinese ride-hailing app Didi Global fell 4.0% after shareholders voted for delisting from the New York Stock Exchange. read more

Progress issues outperformed the NYSE by a ratio of 2.43 to 1; on the Nasdaq favored a ratio of 1.44 to 1 advance.

The S&P 500 posted a new 52-week high and 31 new lows; The Nasdaq Composite recorded 27 new highs and 142 new lows.

Volume on US stock exchanges was 10.93 billion shares, compared to the average of 13.36 billion over the last 20 trading days.

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Reporting by Stephen Culp; additional reporting from Devik Jain and Anisha Sircar in Bengaluru; Edited by David Gregorio

Our standards: Thomson Reuters Trust Principles.

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