Sunday, May 26, 2024

Stocks open higher on Wall Street following burst of deals

by Associated Press

Stocks are moving broadly higher on Wall Street in early trading Monday as investors welcome news of several big corporate deals.

The S&P 500 was up 1.7%, led by gains technology stocks and companies that rely on consumer spending. The gains reversed more than half of the benchmark index’s losses from last week, when the S&P 500 posted its biggest weekly decline since June. Treasury yields were headed lower, signaling caution in the market.

Nvidia jumped 9.1%, the biggest gainer in the S&P 500, after announcing plans to buy fellow chipmaker Arm Holdings in a deal worth up to $40 billion. Oracle climbed 4.3% after the business software maker beat out Microsoft to become the “trusted technology provider” of TikTok, the popular video-sharing app based in China. And the stock of Immunomedics more than doubled after the cancer drug specialist agreed to be acquired by Gilead Sciences in a $21 billion deal.

The Dow Jones Industrial Average was up 369 points, or 1.3%, to 28,034 as of 10:18 a.m. Eastern time. The Nasdaq, which includes many tech stocks, rose 2.3%. European markets were mixed and Asian markets closed broadly higher.

The S&P 500 is coming off a two-week slide amid increased volatility in the market as investors turn cautious following a five-month rally for stocks fueled largely by a run-up in big tech companies. The pandemic accelerated the use of online services by businesses and individuals, driving shares of Apple, Amazon, Microsoft, Zoom Video and other tech companies sharply higher through the summer.

But concerns that the high-flying tech stocks had soared too high have put investors in a selling mood in September. The S&P 500 is down 3% so far this month, while the Nasdaq has pulled back 5.8%.

One big factor that remains in the stock market’s favor is the Federal Reserve, which continues to pump aid into the economy. It has slashed short-term interest rates to record lows and bought up all kinds of bonds to support markets. It also said recently it will keep delivering stimulus even if inflation rises above its target level, as long as inflation had been well under it before then.

Investors will be focused this week on the central bank’s latest interest rate and economic policy update on Wednesday.

In Europe, France’s CAC 40 gained 0.4%, while Germany’s DAX dropped 0.1%. Britain’s FTSE 100 edged 0.1% lower.

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