Technology and reopening stocks surged as signs of continued recovery were felt ahead of the quarterly earnings season. The S&P 500 and Dow were at record highs at the close on Monday.
The S&P 500 added 1.41%, ending the day at a closing high of 4,076.72. The Dow Jones Industrial Average gained 1.13%, or 373 points, closing at an all-time high of 33,527.19. Moreover, the Nasdaq Composite climbed 1.67%.
The reading for March ISM nonmanufacturing data was 63.7, beating expectations of 59. It represented the highest reading since 1997 for the service sector index.
The reopening of leisure & hospitality, Jefferies said in a note, hit a higher gear in March. Moreover, evidence suggests that it will hit an even higher gear in April, it said.
The vaccine distribution process has been progressing well. A more normal economy appears to be close at hand, Jefferies’ note added.
The services sector accounts for about 80% of U.S. private-sector gross domestic product (GDP). This sector is a critical component of the U.S. economy.
The jobs report in March showed the U.S. created 916,000 that month. The figure was above the 660,000 mark, with the unemployment rate dropping to 6% from the previous 6.2%. The strong data on services came only days after this positive data.
The backdrop of data helped the reopening trade with bullish bets on stocks tied to the progress of economic reopening. Moreover, a sharp rise in Airlines, cruise lines, as well as casinos.
Stocks on The Move
Alphabet’s Google further rose by a confirmation that it had won a court ruling. The court ruling declared that the search engine company had not infringed Oracle’s Java software.
It will stop using Oracle’s finance software and instead use financial software from SAP SE ADR, Google said in a separate announcement.
Tesla was one of the best performers on the day, rising 5% after it reported record first-quarter deliveries.
United Airlines Holdings, American Airlines Group, Carnival, Norwegian Cruise, and MGM Resorts ended higher.
Technology stocks rose more than 1%, led by mega-cap tech ahead of the quarterly earnings season.
Microsoft, Google-parent Alphabet, and Facebook hit record highs. Amazon.com and Apple advanced more than 2%.
Archegos-linked Stocks Slide
On Monday, Archegos Capital Management’s bets put pressure on ViacomCBS, Discovery Inc., and other media stocks. One analyst said it was unclear when banks exposed to the troubled family office would sell off their positions in the shares.
Run by U.S. investor Sung Kook “Bill” Hwang, Archegos was caught on the wrong side of debt-laden bets on these companies’ stocks last month. It has forced several Wall Street banks acting as brokers to sell shares in the companies.