Monday, May 20, 2024

Big Tech leads gains as Wall Street opens broadly higher

by Associated Press

Stocks are opening higher on Wall Street led by gains in Big Tech companies. The S&P 500 was up 0.4% early Wednesday. The index is headed for its fourth straight quarter of growth after hitting a bottom just over a year ago at the onset of the coronavirus pandemic. Energy companies have been leading the market higher since the beginning of the year as oil prices moved sharply higher. That’s one of several signs that investors hope the economy will start to pick up this year as more people get vaccinated and as more restrictions on businesses, travel and schooling lift.

Global shares were mostly lower Wednesday despite data that pointed to a strong economic recovery in China, as worries lingered about the pandemic.

France’s CAC 40 inched down less than 0.1% to 6,085.03 in early trading, while Germany’s DAX also fell less than 0.1% to 15,004.40. Britain’s FTSE 100 slipped 0.4% to 6,745.59. U.S. shares were set for a slow start, with Dow futures down 0.1% at 32,879. S&P 500 futures fell 0.1% to 3,943.62.

A survey released Wednesday showed China’s factory activity rebounded in March from a three-month slowdown as export orders rose. The monthly index of manufacturing issued by the China’s statistics agency and an industry group rose to 51.9 from February’s 50.6 on a 100-point scale on which numbers above 50 show activity expanding.

Chinese manufacturing has recovered to above pre-pandemic levels in most industries but consumer and export demand have been slower to bounce back. Restrictions on trade in technology have also hurt exports, economists said.

“Let’s reiterate that the technology war is the No. 1 risk faced by China in 2021. Chinese companies continue to face difficulties in buying and selling technology parts, products and services from companies on the U.S. entity list, which can include non-U.S. companies,” said Iris Pang, chief economist at IG.

“Another risk, which is hopefully temporary, is the fragile recovery of export demand that comes from restrictive social distancing measures, and even lockdowns, in the U.S. and Europe,” Pang said in a commentary.

In Asian trading, Japan’s benchmark Nikkei 225 dipped 0.9% to 29,178.80. Australia’s S&P/ASX 200 added 0.8% to 6,790.70. South Korea’s Kospi fell 0.3% to 3,061.42. Hong Kong’s Hang Seng slipped 0.7% to 28,378.35, while the Shanghai Composite shed 0.4% to 3,441.91.

Shares in Mitsubishi UFJ Financial Group dropped 3.9% in Tokyo trading after one of its group companies, Mitsubishi UFJ Securities Holdings Co., said it may suffer losses estimated at $300 million related to a U.S. client. It did not give details.

Nomura Holdings shares continued their slide after a similar statement earlier in the week, slipping 2.9% on Wednesday. Media reports have said the recent woes at global financial companies are related to troubled New York-based hedge fund Archegos Capital Management.

Investors are awaiting details of President Joe Biden’s proposals for spending perhaps even more than $3 trillion on infrastructure and other measures to help the economy and environment.

Despite the pressure on big tech stocks, most professional investors remain optimistic that the broader market can keep rising. A stronger economy thanks to COVID-19 vaccinations and massive spending by the U.S. government should help boost profits for many companies this year, particularly those like banks, energy producers and industrial companies.

Much of the market’s choppiness is reflecting that expectation. Investors have been shifting money away from companies like Amazon and Netflix, which benefited from a world on lockdown, to airlines, automakers and others that are poised to benefit from a broader reopening.

In energy trading, U.S. benchmark crude rose 27 cents to $60.82 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, added 29 cents to $64.43 a barrel.

In currency trading, the U.S. dollar rose to 110.60 Japanese yen from 110.37 yen. The euro cost $1.1744, up from $1.1722.

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