Stocks Open Higher, Led by Tech
Major U.S. stock indexes opened higher Tuesday, putting stocks on course for a second day of gains led by technology companies, while bitcoin prices edged lower after a period of volatile trading.
The broad S&P 500 index rose 0.3%, while the blue-chip Dow Jones Industrial Average gained 0.2%. The Nasdaq-100 rose 0.4%, putting technology stocks for gains a day after they led broader markets higher.
Stocks jumped to start the week, as recent comments from Federal Reserve officials helped ease concerns that rising inflation could stamp out growth or prompt the central bank to suddenly tighten policy.
“The comments we have had from Fed speakers have told the market exactly what it wants to hear: that they are not concerned about the inflation data and that it hasn’t changed their plan to be very cautious,” said Hugh Gimber, a strategist at J.P. Morgan Asset Management.
Bitcoin prices edged lower following several days of whipsaw trading for cryptocurrency markets. Bitcoin fell 4.8% to $37,120 from late Monday afternoon. Investors felt reassured during the recent episode that more traditional asset classes haven’t been harmed by Bitcoin’s volatile trading, said Mr. Gimber.
“With all the volatility we have had, it is encouraging to see broader markets are still focused on the economic fundamentals,” he said.
Investors are awaiting data on the U.S. housing market, set to be released at 10 a.m. ET. The data are expected to show sales of newly built homes cooled in April amid high prices and tight inventories. The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 13.2% in the year that ended in March.
Moderna rose 1.7% in early trading, after the drugmaker said its Covid-19 vaccine was effective in children between the ages of 12 and 17.
Lordstown Motors plunged 15% after the electric-truck startup said it was facing higher-than-expected costs and cut its 2021 production forecast. AutoZone slid 0.3% after the auto-parts retailer’s sales beat expectations.
U.S. consumer confidence data for May is also set to be released at 10 a.m. ET.
Overseas, the Stoxx Europe 600 rose 0.2%, led by its tech sector which jumped 1.7%.
German property company Deutsche Wohnen jumped nearly 16% after it welcomed a takeover bid from peer Vonovia that would create Europe’s largest residential real estate group, with a combined market capitalization of around €45 billion, equivalent to around $55 billion. Vonovia shares fell over 4%.
Sweden’s Sinch rose 2% after the Softbank -backed software company said it had raised over $1 billion through a share issue.
In China, the Shanghai Composite Index jumped 2.4%, its biggest one-day move since October, bringing it to its highest closing level in three months. Spirits giant Kweichow Moutai, mainland China’s most valuable stock, surged 6%. The nation’s currency rose 0.2% to 6.41 yuan per dollar, its strongest level in three years.
Chinese authorities have voiced concerns in recent days about rising prices for raw materials such as iron ore and copper, which has helped soothe investors’ concerns about inflation, said Steven Leung, executive director of institutional sales at UOB Kay Hian in Hong Kong.
Japan’s Nikkei 225 rose 0.7%, while in Hong Kong, the Hang Seng gained 1.8%.
Brent crude oil, the global oil benchmark, fell 0.4% to $68.07 a barrel. Gold, a typical hedge against inflation, edged down 0.1% to $1,883 a troy ounce.
U.S. government bonds yields fell. The yield on the benchmark 10-year U.S. Treasury note declined to 1.591% from 1.608% Monday. Yields move inversely to prices.
—Joanne Chiu contributed to this article.
Write to Will Horner at William.Horner@wsj.com
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Published at Tue, 25 May 2021 13:32:00 +0000