Dow leads Wall Street higher as investors eye beyond tech
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[July 25, 2023] By
Carolina Mandl and Bansari Mayur Kamdar
(Reuters) - The Dow Jones Industrial Average led Wall Street higher on
Monday and notched its longest winning streak in six years as investors
bet on sectors beyond technology in a week filled with earnings reports
and a Federal Reserve meeting.
"What you're seeing now is people broadening the breadth of the market,"
said Randy Frederick, managing director of trading and derivatives at
the Schwab Center for Financial Research.
"People are starting to maybe take some profits (in tech) and invest in
other parts of the markets that they might see a little bit better
bargain."
Investors are awaiting Microsoft, Google-owner Alphabet and Meta
Platforms earnings this week, which will show whether their stocks
justify sky-high valuations.
The tech-heavy Nasdaq Composite Index has rallied 34.3% this year,
outperforming its peers as rate-sensitive megacap growth companies rose
on optimism about artificial intelligence and an end to the Fed's
tightening cycle.
The Nasdaq lagged other indexes as investors looked to non-tech stocks
for bargains, lifting sectors from energy to banks.
Helping the Dow notch its longest winning streak since February 2017,
Chevron gained almost 2% as the oil giant posted upbeat preliminary
quarterly earnings over the weekend.
As of Friday, second-quarter earnings are expected to decline by 7.9%,
Refinitiv data showed.
Investors ignored a survey showing July U.S. business activity had
slowed to a five-month low, dragged down by decelerating service-sector
growth.
"You've got an increasing belief that soft landing and an increasingly
dovish Fed may occur," said Carol Schleif, chief investment officer with
the BMO Family Office, adding some sideline cash is coming back to
stocks.
The Fed is expected to raise interest rates by 25 basis points at its
policy-making meeting on Wednesday.
A majority of economists polled by Reuters expect this to be the last
hike of the current tightening cycle, after data this month showed signs
of disinflation.
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Traders work on the floor of the New
York Stock Exchange (NYSE) in New York City, U.S., July 20, 2023.
REUTERS/Brendan McDermid/File Photo
The Dow Jones Industrial Average rose 183.55 points, or 0.52%, to
35,411.24, the S&P 500 gained 18.3 points, or 0.40%, to 4,554.64 and
the Nasdaq Composite added 26.06 points, or 0.19%, to 14,058.87.
Volume on U.S. exchanges was 9.43 billion shares, compared with the
10.30 billion average for the full session over the last 20 trading
days.
Nine of the 11 major S&P 500 sectors rose, led by a gain in energy
stocks.
Toymaker Mattel rose 1.8% as the "Barbie" movie set a record as the
biggest domestic debut of 2023.
AMC Entertainment jumped 32.9% after a judge blocked the theater
chain's stock conversion plan that risked diluting investors'
holdings in the company. AMC's preferred shares closed flat.
U.S.-listed shares of Chinese companies like Alibaba and JD.com rose
4.5% and 3.5% respectively as its top leaders announced economic
policy adjustments to expand domestic demand.
Exchange operator Nasdaq trimmed the weight of a handful of
companies that make up close to half of the Nasdaq 100 to address
"over-concentration" in the benchmark.
Advancing issues outnumbered decliners on the NYSE by a 1.61-to-1
ratio; on Nasdaq, a 1.09-to-1 ratio favored decliners.
The S&P 500 posted 22 new 52-week highs and one new low; the Nasdaq
Composite recorded 58 new highs and 97 new lows.
(Reporting by Carolina Mandl, in New York, Bansari Mayur Kamdar and
Johann M Cherian in Bengaluru; Editing by Shounak Dasgupta, Anil
D'Silva and Richard Chang)
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