NEW YORK: The Dow Jones Industrial Average led Wall Street higher on Monday (July 23) and notched its longest winning streak in six years as investors bet on sectors beyond technology in a week filled with earnings reports and a Federal Reserve (Fed) meeting.
The Dow Jones Industrial Average rose 183.55 points, or 0.52%, to 35,411.24, the S&P 500 gained 18.3 points, or 0.40%, to 4,554.64 and the Nasdaq Composite added 26.06 points, or 0.19%, to 14,058.87.
“What you’re seeing now is people broadening the breadth of the market,” said Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research.
“People are starting to maybe take some profits (in tech) and invest in other parts of the markets that they might see a little bit better bargain.”
Investors are awaiting Microsoft, Google owner Alphabet and Meta Platforms earnings this week, which will show whether their stocks justify sky-high valuations.
The tech-heavy Nasdaq Composite Index has rallied 34.3% this year, outperforming its peers as rate-sensitive megacap growth companies rose on optimism about artificial intelligence and an end to the Fed’s tightening cycle.
The Nasdaq lagged other indices as investors looked to non-tech stocks for bargains, lifting sectors from energy to banks.
Helping the Dow notch its longest winning streak since February 2017, Chevron gained almost 2% as the oil giant posted upbeat preliminary quarterly earnings over the weekend.
“You’ve got an increasing belief that soft landing and an increasingly dovish Fed may occur,” said Carol Schleif, chief investment officer with the BMO Family Office, adding some sideline cash is coming back to stocks.
The Fed is expected to raise interest rates by 25 basis points at its policy-making meeting on Wednesday.
“US stocks are catching a modest bid here as optimism grows that the Fed won’t remain hawkish and will likely signal they will deliver one more hike and potentially pause for a long time,” said Oanda’s Edward Moya.
US-listed shares of Chinese companies like Alibaba and JD.com rose 4.5% and 3.5% respectively as its top leaders announced economic policy adjustments to expand domestic demand.
Exchange operator Nasdaq trimmed the weight of a handful of companies that make up close to half of the Nasdaq 100 to address “over-concentration” in the benchmark. – Reuters, AFP
