Agencies
Karachi
US stocks advanced on Monday, building on their largest weekly percentage gain of the year as investors focused on the Democratic National Convention and the Jackson Hole Economic Symposium.
All three major US stock indexes rose, led by the tech-heavy Nasdaq with help from Nvidia , Alphabet and Tesla. The S&P 500 and the Nasdaq were on track to extend their winning streak for an eighth consecutive session as equities continued to rebound from a steep sell-off two weeks ago driven by recession fears.
"Investors are continuing to breathe a sigh of relief that the body blow received by the equity markets two weeks ago did not result in a larger decline,” said Sam Stovall, chief investment strategist of CFRA Research in New York.
Recent data has shown consumer resiliency despite economic softening, boosting expectations that the Federal Reserve will start lowering interest rates at its September policy meeting by cutting the Fed funds target rate by 25 basis points.
"The reason that investors are feeling optimistic once again is that recent economic reports on inflation, jobs and retail sales offered reasons, to conclude that the economy remains resilient,” Stovall added. "Inflation continues its downward glide and the outlook for consumer spending is still supportive.”
A slim majority of economists polled by Reuters say the Fed will implement three 25-basis-point rate cuts by the end of the year, and the economy will probably be able to avoid recession as inflation abates.
The Jackson Hole Economic Symposium kicks off on Thursday, and Fed Chair Jerome Powell’s remarks on Friday will be parsed for clues regarding the central bank’s path from restrictive to neutral monetary policy.
The Democratic National Convention in Chicago, which starts on Monday, could fuel market volatility as trading volume drops in late summer.
The CBOE market volatility index a gauge of investor anxiety, retreated at a record pace last week from a four-year high amid growing optimism of a soft landing.
Goldman Sachs lowered the odds of a US recession in the next 12 months to 20 percent from 25 percent following the latest weekly jobless claims and retail sales reports.
The Dow Jones Industrial Average rose 160.32 points, or 0.39 percent, to 40,820.08, the S&P 500 gained 33.6 points, or 0.60 percent at 5,587.85 and the Nasdaq Composite added 136.23 points, or 0.77 percent at 17,767.95 points.
All 11 of the major S&P 500 sectors rose, with communication services enjoying the biggest percentage gains.
Advanced Micro Devices rose 3.1 percent after the chipmaker said it plans to acquire server maker ZT Systems for $4.9 billion to expand its artificial intelligence portfolio to better compete with Nvidia.
B. Riley Financial slid 9.1 percent, extending a drop of over 65 percent last week. Co-founder and co-CEO Bryant Riley had offered to buy the bank on Friday after it warned of a hit from its investment in Vitamin Shoppe-owner Franchise Group.
Quarterly results from cybersecurity firm Palo Alto Networks, retailer Target and home improvement chain Lowe’s are due later this week.
Advancing issues outnumbered decliners on the NYSE by a 3.32-to-1 ratio; on Nasdaq, a 2.30-to-1 ratio favored advancers. The S&P 500 posted 29 new 52-week highs and no new lows; the Nasdaq Composite recorded 93 new highs and 49 new lows.