Wall Street indexes rose on Monday after the strong economic data from the US and Chinese industry has reduced concerns about a possible slowdown in the global economy.
The blue-chip index Dow Jones Industrial Average rose by 329.74 points, crossing the 26,000-point mark, thanks in particular to the performance of United Technologies, Caterpillar J.P. Morgan Chase. The index ended the trading session at a level of 26,258.42 points.
The broader S&P 500 added 1.16% to its value after the good performance of the financial sector, ending the session at 2,867.19 points. Last week, S&P 500 marked its best start of the year since 1998 and its strongest quarterly performance since 2009. The broad indicator rose by 13.1% in the first quarter, driven by the technology sector.
The technology index Nasdaq Composite expanded by 1.29% to 7,828.91 points.
The good performance of the stock markets was influenced by the published data on industry and construction in the United States, which proved to be surprisingly positive. In March, industrial expansion surged surprisingly sharply from the February two-year low as a result of new orders and output growth, as well as the strong employment growth, according to a recent study by the Institute for Supply Management (ISM). The ISM, measuring business activity, rose to 55.3 points in March from 54.2 points in February (the lowest level since November 2016), while financial market expectations were for a modest rise to 54.5 points.
The other positive news is related to construction – construction costs surged surprisingly in February, while experts expected a decline.
In China, business mood data in March in small and medium-sized private industrial enterprises, as well as in large and state-owned enterprises, also was positive. The mood and the service providers are higher than the experts’ forecasts.
Monday’s data, however, has provided the necessary relief for investors who have recently been worried about fears of a slowdown in the global economy. Earlier last week, stock markets were under pressure as bond markets signaled a recession in the United States.
The yields on 10-year Treasuries rose by 6 basis points to 2.483%, while yields on 30-year bonds reached 2.876%. The rise in bond yields helped boost bank stocks. Higher bond yields mean that banks can benefit from higher interest rates on loans.
Key bond yields fell to their lowest levels in more than a year on March 22 and continued to slide much of last week after the Federal Reserve said it was seeing slower growth in the economy and no longer expected to raise interest rates this year.
The next round of trade talks between the US and China ended last week, with US officials saying Beijing has made proposals on a number of issues, including on technology transfer. Both countries are continuing negotiations this week.
Corporate stocks performance
The FAANG stocks performed particularly strong during the trading session. Facebook added 1.2%, while Amazon, Netflix, and Alphabet reported a rise of 1.9%, 2.9%, and 1.8%, respectively. The stocks of Apple rose more modestly with 0.7%. Other technology companies also rose. Intel climbed 1.5%.
Banks led the way higher. JPMorgan Chase, Citigroup, and Bank of America each jumped by 3.4% each, while Morgan Stanley added 3.1%.
Lyft sank 12%, giving up the gains it posted on its first day of trading Friday.
Consumer product makers and utility companies, which are considered safe-play investments, lagged the market. Clorox fell 1.2% and NRG Energy slid 1.7%.
The stocks of the technology developer Roku Inc rose by 7% after KeyBanc Capital Markets analyst Evan Wingren raised his target price on the stock to 76 USD from 63 USD.
The shares of Cal-Maine Foods fell by 3.8% after the egg producer and distributor reported fiscal third-quarter earnings that beat Wall Street expectations.
The stocks of Eastman Kodak could be in focus ahead of the company’s quarterly earnings report, set to be released after the market close.
Corporate earnings reports
the egg producer and distributor Cal-Maine Foods reported earnings per share of 0.82 USD for its fiscal third quarter of the year, beating the analysts’ expectations. However, the figure is down from the company’s earnings per share of 1.26 USD from the same time last year. The Cal-Maine Foods earnings report for its fiscal third quarter of 2019 also includes net income of 39.77 million USD. The company reported revenue of 383.99 million USD.