S&P 500 Rises on Megacap Stock Boost, Twitter Surge
The benchmark S&P 500 index rose on Monday, boosted by megacap tech and growth stocks and a surge in Twitter after Elon Musk revealed his stake in the company, amid cautionary signals in the bond market and talk of more sanctions against Russia over Ukraine.
Defensive sectors, such as utilities and healthcare, lagged.
Shares of Twitter surged after Tesla Inc Chief Executive Musk revealed a 9.2 percent stake in the micro-blogging site, making him its largest shareholder. Shares of other social media companies also rose.
Tesla shares rose after the company on Saturday reported record electric vehicle deliveries for the first quarter.
“A lot of the news we are seeing today is generally positive for technology,” said Mona Mahajan, senior investment strategist at Edward Jones.
According to preliminary data, the S&P 500 gained 37.18 points, or 0.82 percent, to end at 4,583.13 points, while the Nasdaq Composite gained 271.77 points, or 1.91 percent, at 14,533.27. The Dow Jones Industrial Average rose 108.18 points, or 0.31 percent, to 34,926.45.
Along with Tesla, gains in Apple Inc, Amazon.com Inc and Microsoft Corp gave boosts to the S&P 500.
In the bond market, the benchmark U.S. 10-year Treasury yield ticked up on Monday and the 2-year/10-year yield curve remained inverted. The curve inversion is seen as a harbinger of a recession in the next two years or so.
“All this talk about an inverted yield curve and what that may be predicting in terms of possible economic slowdown, that puts a premium on growth stocks again,” said Chuck Carlson, CEO of Horizon Investment Services in Hammond, Indiana.
Stocks have rebounded in recent weeks after a rocky start to the year amid concerns about the Federal Reserve tightening monetary policy to fight inflation and the war in Ukraine.
Investors remained concerned about the Ukraine crisis, which has led to a spike in commodity prices that has worsened the outlook for already high inflation.
Global outrage spread on Monday at civilian killings in northern Ukraine, where a mass grave and tied bodies shot at close range were found in a town taken back from Russian troops. The deaths are likely to galvanize the United States and Europe into additional sanctions against Moscow.
In company news, Starbucks Corp fell after former CEO Howard Schultz announced the suspension of the company’s stock repurchasing program.
U.S.-listed shares of Chinese companies such as Alibaba jumped after China proposed revising confidentiality rules involving offshore listings.
(Reuters)