After a weak start and a subsequent modest recovery, U.S. stocks tumbled on Monday but turned positive in the final hour to eventually end the session on a firm note.
The major averages all ended with solid gains but it was the Nasdaq which hogged the limelight, gaining as much as 201.38 points or 1.63 percent as it settled at 12,536.02, rallying more than 330 points from a low of 12,202.41.
The Dow settled with a gain of 84.29 points or 0.26 percent at 33,061.50, rebounding from a low of 32,449.87, while the S&P 500 climbed from 4,062.51 to settle at 4,155.38, recording a gain of 23.45 points or 0.57 percent.
Traders, looking ahead to the Federal Reserve’s monetary policy announcement on Wednesday, largely shrugged off a report from the Institute for Supply Management showing growth in U.S. manufacturing activity unexpectedly slowed in the month of April.
The ISM said its manufacturing PMI fell to 55.4 in April from 57.1 in March. While a reading above 50 still indicates growth in the sector, economists had expected the index to inch up to 57.6.
A separate report released by the Commerce Department showed a modest increase in U.S. construction spending in the month of March.
The unexpected decrease by the headline index came as the employment index slumped to 50.9 in April from 56.3 in March.
On Wednesday, the ISM is scheduled to release a separate report on activity in the service sector in the month of April. The services PMI is currently expected to inch up to 58.9 in April from 58.3 in March.
A report released by the Commerce Department showed construction spending in the U.S. inched up by 0.1 percent to an annual rate of$1.731 trillion in March after rising by 0.5 percent to a revised rate of $1.729 trillion in February. Economists had expected construction spending to increase by 0.7 percent.
The uptick in total construction spending came as spending on private construction rose by 0.2 percent to an annual rate of $1.380 trillion.
The Fed is widely expected to announce a 50-basis point rate hike on Wednesday, the first such increase in about 20 years.
Netflix and Meta Platforms surged up 4.4 percent and 5.3 percent, respectively, contributing significantly to the rally in the final hour.
Microsoft gained about 2.5 percent and Alphabet, the Google parent, surged up 2.2 percent. Amazon Inc and Apple Inc edged up marginally thanks to some brisk buying in the closing minutes.
Intel climbed more than 3 percent. Home Depot, Chevron, Cisco Systems, Honeywell International, Walt Disney, Goldman Sachs, Nike, 3M, JP Morgan Chase and Salesforce.com also closed with strong gains.
Coca-Cola, American Express, United Health, P&G, Merck and McDonalds closed weak.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Monday, with several markets closed on the day. Japan’s Nikkei 225 Index edged down by 0.1 percent, while Australia’s S&P/ASX 200 Index slid by 1.2 percent.
European stocks also moved to the downside. While the U.K. markets were closed for a bank holiday, the German DAX Index drifted down 1.13 percent and the French CAC 40 shed 1.66 percent. The pan European Stoxx 600 tumbled 1.46 percent.
In the bond market, treasuries moved notably lower as traders looked ahead to the Fed decision. The yield on the benchmark ten-year note briefly touched the 3 percent mark before easing to 2.980 percent.
Source: Read Full Article