(RTTNews) – Stocks moved moderately higher during trading on Monday, regaining ground after ending last Friday’s session well off their worst levels but still mostly lower. With the upward move, the tech-heavy Nasdaq reached a new record closing high.
The major averages all ended the day in positive territory. The Nasdaq climbed 98.31 points or 0.5 percent to 21,978.70, the Dow increased 114.09 points or 0.3 percent to 45,514.95 and the S&P 500 rose 13.65 points or 0.2 percent to 6,495.15.
The strength on Wall Street partly reflected optimism about the outlook for interest rates following last Friday’s weaker-than-expected U.S. employment data.
Following the release of a closely watched report showing employment increased by much less than expected in the month of August, the Federal Reserve is widely expected to lower rates later this month.
CME Group’s FedWatch Tool is currently indicating 88.2 percent chance the Fed will lower rates by a quarter point and a slim 11.8 percent chance of a half-point rate cut.
Trading activity was somewhat subdued, however, as traders looked ahead to the release of inflation data that could impact the outlook for rates.
The Labor Department is scheduled to release reports on producer price inflation and consumer price inflation on Wednesday and Thursday, respectively.
Economists currently expect the annual rate of producer price growth in August to come in unchanged from July at 3.3 percent.
The annual rate of growth by consumer prices is expected to accelerate to 2. 9 percent in August from 2.7 percent in July, while the annual rate of growth by core consumer prices, which exclude food and energy prices, is expected to hold at 3.1 percent.
Sector News
Software stocks turned in some of the market’s best performances on the day, driving the Dow Jones U.S. Software Index up by 1.2 percent.
An increase by the price of gold also contributed to strength among gold stocks, as reflected by the 1.2 percent gain posted by the NYSE Arca Gold Bugs Index.
Networking and retail stocks also saw notable strength, while telecom, utilities and natural gas stocks moved to the downside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan’s Nikkei 225 Index shot up by 1.5 percent, while China’s Shanghai Composite Index climbed by 0.4 percent.
The major European markets also moved to the upside on the day. While the German DAX Index and the French CAC 40 Index advanced by 0.9 percent and 0.8 percent, respectively, the U.K.’s FTSE 100 Index inched up by 0.1 percent.
In the bond market, treasuries extended the strong upward move seen over the past few sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell 4.0 basis points to a five-month closing low of 4.046 percent.
Looking Ahead
A lack of major U.S. economic data may keep some traders on the sidelines on Tuesday ahead of the release of the inflation data later in the week.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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