© Reuters. FILE PHOTO: Traders work at the New York Stock Exchange (NYSE) in New York City, US, July 20, 2023. REUTERS/Brendan McDiarmid/File Photo
Written by Carolina Mandel and Bansari Mayur Kamdar
(Reuters) – Wall Street led higher on Monday, posting its longest winning streak in six years, as investors bet on non-technology sectors in a week packed with earnings reports and the Federal Reserve meeting.
“What you’re seeing now is people are scaling up the market,” said Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research.
“Maybe people will start taking some profits (in technology) and invest in other parts of the markets where they might see a slightly better deal.”
Investors await this week’s Microsoft (NASDAQ:), Alphabet (NASDAQ:) and Google’s owner Meta Platforms earnings, which will show whether their shares justify higher valuations.
The heavy tech index is up 34.3% this year, outperforming its peers as price-sensitive growth giants surged amid optimism about artificial intelligence and the end of the Fed’s tightening cycle.
The Nasdaq lagged behind other indices as investors looked to non-technology stocks for bargains, lifting sectors from energy to banking.
helping the Dow post its longest winning streak since February 2017, chevron (NYSE:) rose nearly 2% as the oil giant posted upbeat preliminary quarterly earnings over the weekend.
As of Friday, second-quarter earnings are expected to decline 7.9%, Refinitiv data showed.
Investors shrugged off a survey showing business activity in the United States slowed in July to a five-month low, dragged down by slowing services sector growth.
“You have a growing belief that a soft landing and the Fed are increasingly likely to occur,” said Carol Schliffe, chief investment officer at BMO Family Office, adding that some of the side money is coming back into equities.
The Federal Reserve is expected to raise interest rates by 25 basis points at its policy-making meeting on Wednesday.
The majority of economists polled by Reuters expect this to be the last increase in the current tightening cycle, after data this month showed signs of easing inflation.
The Dow Jones Industrial Average increased 183.55 points, or 0.52%, to 35411.24, and the Nasdaq Composite Index increased 18.3 points, or 0.40%, to 4,554.64 points.
Trading volume on US exchanges reached 9.43 billion shares, compared to an average of 10.30 billion shares for the full session over the last 20 trading days.
Nine of the 11 major sectors of the Standard & Poor’s 500 index rose, led by higher energy stocks.
Toymaker Mattel (NASDAQ: ) rose 1.8% as “Barbie” set a record as the biggest domestic debut of 2023.
AMC Entertainment (NYSE) stock jumped 32.9% after a judge blocked an equity conversion plan for the theater chain that would have risked reducing investors’ holdings in the company. AMC preferred shares closed flat.
Shares of Chinese companies listed in the United States such as Ali Baba (NYSE:) and JD (NASDAQ:). com rose 4.5% and 3.5%, respectively, as its top leaders announced economic policy adjustments to expand domestic demand.
Stock operator Nasdaq has trimmed the handful of companies that make up nearly half to tackle “excessive concentration” in the index.
Advances outnumbered losers on the New York Stock Exchange by 1.61 to 1. On the Nasdaq, it was 1.09 to 1 in favor of decliners.
The S&P 500 posted 22 new 52-week highs and a new low. The Nasdaq Composite posted 58 new highs and 97 new lows.
(This story has been corrected to change NASDAQ year-to-date performance change to 34.3% from 41% in paragraph 5)