Major Wall Street indices rose on Monday on the boost from tech stocks, while signs of progress in the development of a COVID-19 vaccine and a string of multi-million dollar deals also cheered spirits.
US stocks were jubilant at the opening Monday following news that Oracle was slated to be the US partner for video-sharing app TikTok in a potential sale.
About 55 minutes after the trade, the Dow Jones Industrial Average was up 1.4 percent to 28,044.98.
The broad-based S&P 500 rose 1.7 percent to 3,399.07, while the tech-rich Nasdaq Composite Index, which has struggled in recent sessions amid concerns about overvaluation of stocks, it shot up 2.3 percent to 11,098.90.
Oracle had gained 4.3 percent before operations were halted around 1333 GMT, after the US government confirmed that it had received an offer from the company for US operations of TikTok. After the parent company of the video-sharing app, ByteDance, rejected a proposal from Microsoft.
Citing concerns about US data security, President Donald Trump has sought the sale of ByteDance’s TikTok, issuing an executive order last month stating that if a purchase agreement was not reached by 20 September, the platform would have to close in the United States.
Amazon also won, which saw a 1.8 percent increase after announcing that it would hire 100,000 new employees and open 100 new facilities in the US and Canada.
Pfizer Inc gained 1.1% after drugmaker and German biotech company BioNTech SE proposed to expand their pivotal phase 3 COVID-19 vaccine trial to about 44,000 participants.
Traders are looking ahead to the Federal Reserve’s two-day meeting starting Tuesday, in which central bankers can delve into their new average inflation targeting strategy that will keep interest rates low for longer in a bid to maximize employment.
Any comment made regarding the current deadlock between the White House and Congress on new fiscal stimulus to prop up the US economy as it copes with the coronavirus pandemic would also be cause for concern.
Nvidia Corp jumped 9.0% on plans to buy UK-based chip designer Arm from Japan’s SoftBank Group Corp for up to $ 40 billion, in a deal aimed at reshaping the global semiconductor landscape.
The Philadelphia SE chip index rose 2.6%. The technology index added 2.4%, more than any other major S&P sector.
“Wall Street always rewards growth,” said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.
“That’s why these deals are exciting, because if you put two companies together, by definition, you are going to have inorganic growth, but you are going to see growth.”
The S&P 500 is coming off two straight weeks of losses as investors sold off heavyweight tech stocks that had propelled the benchmark to all-time highs in a spectacular recovery from its March lows.
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