The facade of the New York Stock Exchange, is seen Wednesday, June 16, 2021. Stocks are opening mostly higher on Wall Street, getting the week off to a positive start after the S&P 500 posted its biggest weekly decline since February. The benchmark index was up 0.3% in the first few minutes of trading Monday, June 21. (AP Photo/Richard Drew)
Stocks were posting solid gains in afternoon trading Monday, following the market's steep declines the previous week.
Technology stocks were leading the broad gains. Banks and industrial companies, which were hit hard last week, were also among the biggest gainers.
The S&P 500 index was up 1.2% as of 12:39 p.m. Eastern. The Dow Jones Industrial Average was up 495 points, or 1.5%, to 33,785 and the technology-heavy Nasdaq gained 0.7%.
The gains were widely shared, with every sector and more than 90% of stocks in the benchmark S&P 500 moving higher. Smaller company stocks were outpacing the broader market in a signal that investors were feeling more confident heading into the week. The Russell 2000 index rose 2%.
Stocks fell sharply last week after Federal Reserve officials indicated that they were willing to start raising interest rates in 2022 or 2023, earlier than what the Fed had forecast previously. The change of outlook comes as the U.S. economy is recovering from the pandemic, but also being impacted by inflation for the first time in more than a decade.
The Fed also has begun talks about slowing its $120 billion of monthly bond purchases, which are helping to keep mortgages and other longer-term borrowing cheap. But the Fed’s chair has said such a tapering is still likely a ways away.
Any pullback in Fed support would be a big change for markets, which have been feasting on ultra-low rates for more than a year.
Investors will get a slew of economic data this week that will help give the market some direction, including another read on inflation on Friday. Other data out this week includes sales of previously occupied homes, manufacturing and a final reading on first quarter GDP.
Bond prices fell. The yield on the 10-year Treasury note rose to 1.48% from 1.43% late Friday.
Corporate deals helped lift shares of some companies well beyond the markets gains. Industrial products maker Raven Industries jumped 50% on news it is being bought by CNH Industrial. Engineered products company Lydall surged 85% on news of its sale to Clearlake Capital-backed Unifrax.
Chipmaker Nvidia fell 2.9% as China’s biggest banks promised to refuse to help customers trade Bitcoin and other cryptocurrencies. Nvidia makes chips for cryptocurrency mining.7 Hotel Stocks Just Waiting For the Vaccine
Like any group of stocks related to travel and tourism, hotel stocks saw a steep drop in share prices in 2020. The leisure and hospitality sector that once had 15 million employees has lost 4 million jobs since February.
Many major cities will be feeling the ripple effects of the Covid-19 pandemic for years. However, there is ample evidence that shows the pandemic may be coming to an end. The number of new cases is dropping. The number of those getting vaccinated is rising. And even in the cities with the most restrictive mitigation measures, the slow process of reopening is beginning.
All of this can’t come fast enough for individuals who rely on the travel and tourism industry for their livelihood. Hotel chains had at least some revenue coming in the door. And when earnings season concludes, the more budget-friendly hotel chains may realize revenue that is 75% of its 2019 numbers. But that is not enough to bring the hotels to anywhere near full employment. Particularly with hotels that have bars and restaurants that have remained closed or open at limited capacity.
Many economists are optimistic that travel may begin to look more normal by the summer of this year. And the global economy may deliver 6.4% GDP growth this year. With that in mind, the hotel chains with the best fundamentals and the broadest footprint will be in the best position as the economy reopens.
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