NEW YORK: US stocks opened higher on Monday, with the Dow Jones Industrial Average hitting a record high, as investors snapped up beaten down technology stocks.
The S&P technology sector is coming off its second straight weekly decline, triggered by fears of stretched valuations and investors moving money to other sectors. Tech stocks have led the S&P 500’s rally this year.
Leading the rebound, Apple, Microsoft and Alphabet were all up about 1.2%.
Apple provided the biggest boost to the three major sectors.
The tech sector’s 1.25% rise led the gainers on the S&P 500.
Consumer staples stocks, which were battered on Friday after Amazon.com’s US$13.7bil deal to buy upscale grocer Whole Foods, added to their losses in early trading.
The deal by Amazon, a proven retail disruptor, marked a major step by the Internet retailer into the brick-and-mortar retail sector.
Wal-Mart, Target and Costco reversed premarket gains to trade lower.
At 9:43am ET (1143 GMT), the Dow Jones Industrial Average was up 75.35 points, or 0.35%, at 21,459.63 and the S&P 500 was up 11.35 points, or 0.46%, at 2,444.50. The Nasdaq Composite was up 58.87 points, or 0.96%, at 6,210.63.
New York Fed president William Dudley, a close ally of Fed chair Janet Yellen, said US inflation was a bit low but should rise alongside wages as the labor market continues to improve, allowing the Federal Reserve to continue gradually tightening US monetary policy.
Yellen’s confidence as her team raised interest rates for the third time in six months last week surprised investors who had expected more caution about the economy following a batch of weak US economic data.
“We suspect, an upholding of least one more rate hike will likely be supported,” said aid Peter Cardillo, chief market economist at First Standard Financial in New York.
Last month, the US economy added 138,000 jobs, well below the expected gain of 185,000, while other data showed a fall in retail sales and inflation below the Fed’s target of 2%.
Oil prices edged higher, after coming under pressure over the past month from rising production.
Advancing issues outnumbered decliners on the NYSE by 1,717 to 870. On the Nasdaq, 1,740 issues rose and 660 fell.
The S&P 500 index showed 49 new 52-week highs and 10 new lows, while the Nasdaq recorded 99 new highs and 87 new lows. - Reuters