Dow rises more than 100 points to start the week, tech shares and reopening trades gain

Tiger Newspress2021-05-24

U.S. stocks climbed on Monday as the technology sector and shares benefitting the most from the economic reopening led the advance.

The Dow Jones Industrial Average rose 140 points. The S&P 500 gained 0.6%, while the Nasdaq Composite popped 0.7%.

Tech stocks gained to shake off another rough period for bitcoin over the weekend as thecryptocurrency bounced Monday. The cryptocurrencydropped under $32,000 on Sunday, only to rebound 16% above $38,000 on Monday. On Wednesday, bitcoin prices tumbled to just above $30,000, dropping to the lowest level since late January.

Shares of Tesla, a big holder of the crypto, gained 0.5% in premarket trading despite the bitcoin volatility. Coinbase added 2% in premarket trading as bitcoin stabilized Monday and as Goldmanstarted the crypto-exchange with a buy rating.

Stocks benefiting from the economic reopening gained in premarket trading as well. Share of Gap, Carnival and United Airlines were higher. Norwegian Cruise Line rose 1% in premarket after the cruise line operator announced plans to return cruising in the U.S. this summer.

“We continue to see incremental data points that strengthen our view that when equities break out of this range, the next move is a substantial rise higher,” wrote Tom Lee, head of research at Fundstrat Global Advisors. Lee cited data showing a collapse in Covid-19 cases.

Stocks have stalled lately. The previous week saw the Dow post its fourth negative week in five, but the losses were minor. The Dow dipped just 0.5% on the week, while the S&P lost just 0.4%. The Nasdaq Composite, meanwhile, gained 0.31% last week, snapping a four-week losing streak.

Despite last week’s “collapse in crypto markets and rather hawkish FOMC minutes, another equity dip was bought by investors,” JPMorgan wrote in a note to clients. “This ‘buy the dip’ mentality has been remarkably strong this year and has provided a support preventing any small correction in equities and risk markets from becoming more extended,” the firm added.

The Federal Reserve hinted at its April meeting that easy monetary policies could be reconsidered if the economy continues to show signs of rapid improvement, according to minutes from the meeting released last week.

Heading into the last full trading week of the month, the Dow is on track to post a gain for May, while the S&P is on track to snap a three-month winning streak. The Nasdaq Composite, which is down more than 3% for the month, is on track to snap its longest monthly winning streak since Jan. 2018, with its first negative month in seven.

After outperforming year-to-date, small caps have faced recent weakness, and the Russell 2000 is on track to snap a seven-month winning streak.

“We think the choppy/sideways trend will continue for a bit longer, and the market will experience sell-off scares along the way,” noted Adam Crisafulli, founder of Vital Knowledge. “While stocks are absorbing a lot of changes well so far, all the inflection points still have longer to play out.”

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • Daniel Tay
    2021-05-25
    Daniel Tay
    Good start for the week, likes and comment pls 
  • Ekraaj
    2021-05-25
    Ekraaj
    Great news
  • Dawang
    2021-05-25
    Dawang
    Fuel for another run?
  • Mammoth
    2021-05-25
    Mammoth
    nice
  • AnT
    2021-05-25
    AnT
    Alright... Higher highs and higher lows. All set to go... Please like and comment. Thank you
  • darrentanjm
    2021-05-24
    darrentanjm
    Need another healthy correction 
Leave a comment
52