Stocks are starting another week with modest gains on Wall Street, and the S&P 500 is making its latest run at its record high.
The benchmark index was up 0.3% at 3,383.65 after the first half hour of trading. Twice last week, it briefly crossed above its record closing high, which was set in February before the pandemic shut down businesses worldwide and created the worst recession in decades. It’s just 0.1% away from the record close of 3,386.15
The Dow Jones Industrial Average was down 56 points, or 0.2%, at 27,875, as of 10 a.m. Eastern time, and the Nasdaq composite was up 0.9%.
The S&P 500 is coming off a three-week rally that has brought it to the edge of its all-time high, even though investors are still waiting for Congress to offer more aid to the economy. Investors say it’s crucial that the support comes, particularly after $600 in weekly unemployment benefits and other stimulus from the U.S. government expired.
Investors seem to be assuming that both sides will come to a deal, even though they say they remain far apart. Without the lifeline, analysts say the economy won’t be able to make the recovery that investors have been assuming is on the way. And that assumption is a huge reason the stock market is as high as it is.
“Hence, another round of stimulus is the difference between ensuring that the economic recovery continues uninterrupted and a meaningful short-term pullback in growth,” Morgan Stanley strategist Michael Zezas wrote in a report.
Markets seem willing to wait for a deal, for now. But if it gets deep into September, and Democrats and Republicans still remain far apart in their negotiations on the size of the deal, Zezas said it may be too close to the election to get one done.
Wall Street was jumbled in early Monday trading, with slightly more stocks rising than falling. More gains for tech stocks were helping to lift the market. They’ve been remarkably resilient through the pandemic as investors build up bets they can continue to grow as work-from-home and other trends accelerate.
Tech stocks across the S&P 500 climbed 0.8%, and they alone accounted for roughly three-quarters of the index’s gain. Nvidia jumped 5.1% for one of the biggest gains in the index, and Microsoft added 0.8%.
But losses for financial and energy stocks helped restrain the market’s gains. These stocks have often been rising and falling with expectations for the economy, and they had been showing a bit more life in recent weeks.
Shares of several banks were under pressure after Warren Buffett’s Berkshire Hathaway disclosed that it cut back its investments in them. Wells Fargo slumped 2.2% after the famed value investor trimmed Berkshire Hathaway’s ownership stake by about a quarter.
Treasury yields moderated a bit, following the big run for the 10-year yield last week. It dipped to 0.68% from 0.71% late Friday. It had zoomed upward from 0.56% through the week.
Higher yields can be an indication that investors are upgrading their expectations for inflation and the economy. But they can also pull some buyers away from stocks into bonds, hurting stock prices in the process.
European stock markets were making modest moves higher. In Germany, the DAX returned 0.4%, and France’s CAC 40 added 0.2%. The FTSE 100 in London rose 0.7%.
In Asia, Japan’s Nikkei 225 fell 0.8% after data showed the world’s third-largest economy shrank 27.8% from a year earlier in the three months ending in June. That was bigger than the deepest decline during 2008-09 financial crisis.
Hong Kong’s Hang Seng gained 0.7%, and stocks in Shanghai jumped 2.3%.
Benchmark U.S. crude oil added 0.3% to $42.13 per barrel. Brent crude, the international standard, slipped 0.4% to $44.63.
Gold rose 1.2% to $1,973.20 per ounce.
AP Business Writer Joe McDonald contributed.