Stocks traded mixed on Monday, with the S&P 500 and Dow looking to start May on a positive note while the Nasdaq moved lower.
The S&P 500 added about 0.4%, while the Dow Jones jumped 0.9%. The S&P 500 ended lower on Friday, but still ended its best month since November with a monthly advance of more than 5%. In April, the communications services and consumer discretionary sectors led the gains of the S&P 500, returning to a leading position after lagging earlier in 2021 in a context of rotation towards cyclical stocks and ” reopening”. However, the names of the growth dampened some gains last week, with Federal Reserve Chairman Jerome Powell noting that some asset valuations looked “foamy.”
Still, a wave of stronger-than-expected earnings results from companies across industries helped fuel the latest upward movement in the broader market as corporate profits rebounded alongside the recovery in the market. economic activity. As of Friday, 86% of S&P 500 companies had beaten first-quarter earnings expectations, according to FactSet data. That would mark the highest proportion since at least 2008, if it holds up until the end of the first quarter earnings season. Companies like Uber (UBER), Lyft (LYFT), Square (SQ), Peloton (PTON) and Pfizer (PFE) are set to release their results later this week.
The economic recovery has been supported by the strong pace of vaccinations in the United States, which in turn has allowed more businesses across the country to reopen and boost consumer confidence in a return to some semblance of normalcy. As of Sunday, more than 104 million Americans were fully immunized, according to data from the Centers for Disease Control and Prevention, representing nearly a third of the country’s total population.
However, some strategists have cautioned investors against complacency as the good news about the recovery is now well integrated into the markets.
“I think the market price is almost perfect, right? We have planned a good rollout of vaccines. We have planned a strong reopening of the economy. I am a little concerned about the second half of the year. ‘year, “he added. Allan Boomer, chief investment officer of Momentum Advisors, told Yahoo Finance. “I think it’s possible that in the short term earnings have practically peaked and… it’s been a great quarter, but I don’t know if the rest of the year will be this strong.”
“One of the things I think you’ll start to see is that we have a labor shortage in the United States. We are talking about the jobs that have been lost. We’re not really talking about the fact that there are a lot of them. companies that have a lot of vacancies that are exceptional, ”he added. “So I think you will start to see in the second half of the year especially the companies that depend on the workforce, you will definitely start to see issues around a labor shortage.”
The Labor Department will release its April jobs report on Friday, which is expected to show nearly a million payrolls returned last month, accelerating from March’s gain.
12:05 p.m. ET: Stocks Trade, Nasdaq Dips
Stocks traded mixed on Monday afternoon, with the S&P 500 and the Dow advancing as the Nasdaq falling.
Gains in the S&P 500 were led by the energy, materials and health care sectors. Tech stocks have lagged behind, extending last week’s period of weakness. The Nasdaq turned negative during the afternoon session.
The Dow outperformed, gaining more than 300 points, or 0.9%, from session highs. Materials company Dow Inc (DOW) and Home Depot (HD) led the advances, followed by Walgreens Boots Alliance (WBA) and IBM (IBM).
11:03 a.m. ET: Construction spending increased much less than expected in March
Construction spending rose at a much slower pace than expected in March, with non-residential structures and government spending still moving at a low pace amid the pandemic.
Construction spending rose 0.2% in March from February, the Commerce Department said on Monday. This follows a 0.6% drop in spending in February, largely due to inclement weather. Consensus economists were hoping for a 1.6% rise in construction spending during the month. Still, spending rose 5.3% year over year, with strength in housing construction further helping to support the measure as a whole.
10:56 a.m. ET: US manufacturing activity slowed slightly in April as surging demand pushed prices higher: IHS Markit
The final IHS Markit U.S. Manufacturing Purchasing Managers Index for April edged down at the end of the month as rising costs and supply chain delays weighed on the industry.
The IHS Markit Manufacturing Purchasing Managers Index closed the month at 60.5, below the 60.6 reported in the preliminary print and the 60.7 expected from consensus economists, according to Bloomberg data. Still, the index was strongly in expansionary territory, or well above the neutral level of 50.0.
“US manufacturers reported the biggest boom in at least 14 years in April,” Chris Williamson, chief economist at IHS Markit, said in a press release. “Demand has jumped at a rate unmatched in 11 years amid growing hopes of recovery and further stimulus measures.”
“Supply chain delays worsened, however, operating at the highest level ever recorded by the investigation, stifling production at many companies,” he added. “Suppliers were able to command higher prices due to strong demand for inputs, pushing up material costs. At a rate not seen since 2008.”
9:31 am ET: Stocks open higher
Here’s where the markets open on Monday morning:
S&P 500 (^ GSPC): +23.16 points (+ 0.55%) to 4204.33
Dow (^ DJI): From +199.09 points (+ 0.59%) to 34 073.94
Nasdaq (^ IXIC): +64 points (+ 0.46%) to 14,028.74
Gross (CL = F): + $ 0.24 (+ 0.38%) to $ 63.82 per barrel
Gold (GC = F): + $ 20.90 (+ 1.18%) to $ 1788.60 per ounce
10-year cash flow (^ TNX): -1 bp to give 1.621%
9:27 a.m. ET: Verizon to sell media businesses including Yahoo Finance to Apollo in $ 5 billion deal
Telecommunications giant Verizon (VZ) said on Monday it had agreed to sell its media business segment, including Yahoo and AOL, to private equity firm Apollo Global Management. Verizon is currently the parent company of Yahoo Finance.
The $ 5 billion deal is expected to close in the second half of the year and will rename the company currently known as Verizon Media as Yahoo. Other brands in the portfolio include TechCrunch, Makers, Ryot and Flurry. Verizon’s media group reported revenue of $ 1.9 billion in the first three months of 2021, a 10% year-over-year increase.
8:00 a.m. ET: “ Investments, R&D, and mergers and acquisitions will account for the majority of corporate treasury spending in 2021 ”: Goldman Sachs
With the uncertainty surrounding the end of the pandemic, companies have started to announce ambitious new strategies, many of which involve massive investments in their future growth. Goldman Sachs chief U.S. market strategist David Kostin says that spending will mostly be funneled into one of three key areas.
“Capex, R&D and M&A will account for the majority of companies’ cash expenditure,” Kostin wrote in a note Monday morning. “Many companies took advantage of the 1Q reporting season to announce substantial new growth initiatives. AAPL’s US spending plans ($ 430 billion over 5 years) and capex increases by INTC ($ 20 billion ) and WMT ($ 14 billion) are notable examples. “
“We expect a 19% rebound in cash usage in 2021 and + 6% growth in 2022,” he added. “Taxation poses a risk to the trajectory of cash spending in 2022 and beyond.”
7:27 a.m. ET Monday: Stock futures indicate higher open
Here’s where the markets were trading ahead of the opening bell Monday morning:
S&P 500 Futures (ES = F): 4,194.75, up 20.25 points or 0.49%
Dow Futures (YM = F): 33,967.00, up 200 points or 0.59%
Future Nasdaq (NQ = F): 13,884.00, up 34.25 points or 0.25%
Gross (CL = F): + $ 0.08 (+ 0.13%) to $ 63.66 per barrel
Gold (GC = F): + $ 10.80 (+ 0.61%) to $ 1,778.50 per ounce
10-year cash flow (^ TNX): +1.3 bps for a return of 1.644%
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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