US STOCKS-Wall St ends higher as investors return to megacaps

Phunware

22/07/2024 21:00

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      Nvidia jumps on report of new AI chip for China market
    

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      Mattel soars after Reuters reports buyer interest 
    

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      CrowdStrike slips after Friday's global cyber outage
    

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      Verizon falls on Q2 revenue miss
    

  
 (Updates to close)
    By David French
       July 22 (Reuters) - Wall Street's three benchmarks
closed higher on Monday as investors returned to megacap growth
stocks, helping both the S&P 500  .SPX  and Nasdaq Composite
 .IXIC  recover from their worst weekly performance since April.
        The Dow Jones Industrial Average  .DJI  was also back in
positive territory, breaking a two-session skid since hitting an
all-time closing high last Wednesday.
  
        Megacaps Alphabet  GOOGL.O , Meta Platforms  META.O  and
Tesla  TSLA.O  all advanced after being major drags on the
market last week.
  
    Nvidia  NVDA.O  also rose after Reuters reported the
artificial intelligence chip leader was working on a version of
its new flagship AI chips for the China market that would be
compliant with current U.S. export controls.
    The Information Technology index  .SPLRCT  topped sectoral
gainers, snapping a four-day losing streak.
    "We think this move today probably has more to do with a
rebound from the selling that occurred last week than anything
else," said Jason Pride, chief of investment strategy & research
at Glenmede.
        Chief among the other factors on traders' minds was a
reexamination of the state of the presidential race after U.S.
President Joe Biden announced his withdrawal and endorsed Vice
President Kamala Harris' candidacy for the November election on
Sunday.
    Biden's exit could prompt investors to unwind trades on bets
that a victory for Republican Trump would increase U.S. fiscal
and inflationary pressures. But some analysts said markets could
benefit from an increased chance of a divided government under
the next administration.
    
    
    Online betting site PredictIt showed pricing for a Donald
Trump victory slipped 4 cents to 60 cents, while climbing 12
cents for a Harris win to 39 cents.
        Trump-linked stocks were mixed on Monday, with Trump
Media & Technology Group  DJT.O  dropping, while software firm
Phunware  PHUN.O  gained.
    The question of who will be on the Democratic presidential
ticket compounds investor unease ahead of quarterly earnings,
including from two of the so-called Magnificent Seven companies
- Alphabet and Tesla  TSLA.O .
    The results will test whether the recent rally in top-tier
high-momentum stocks is tenable and if a move to underperforming
sectors will continue.
    "We're seeing the market begin to price in a little bit a
faster set of rate cuts, and that is leading to a bit of a shift
in leadership to favor smaller-cap stocks and to deviate from
the focus on the largest tech companies," said Glenmede's Pride.
        "Obviously today looks a little bit different to that,
but it's still a trend in the background."
  
        According to preliminary data, the S&P 500
 .SPX  gained 60.22 points, or 1.09%, to end at 5,565.22 points,
while the Nasdaq Composite  .IXIC  gained 280.63 points, or
1.57%, to 18,004.62. The Dow Jones Industrial Average
 .DJI  rose 126.30 points, or 0.32%, to 40,417.75.
  
    Cybersecurity firm CrowdStrike  CRWD.O  slumped, extending
losses after a software update from the company sparked Friday's
global tech outage.
    Delta Air Lines  DAL.N  dropped after canceling over 600
flights as it struggled to restore operations after the outage.
    Verizon Communications  VZ.N  fell after a second-quarter
revenue miss.
    Mattel Inc  MAT.O  jumped after Reuters reported the toy
maker had been approached by buyout firm L Catterton with an
acquisition offer.

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The Trump Trade    https://tmsnrt.rs/3YeC3tB
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 (Reporting by Shubham Batra, Ankika Biswas and Lisa Mattackal
in Bengaluru, and David French in New York; Editing by Sherry
Jacob-Phillips, Pooja Desai and Richard Chang)
 ((Shubham.Batra@thomsonreuters.com))