Wall Street’s major indexes climbed on Monday on a boost from technology stocks while signs of progress in developing a COVID-19 vaccine and a spurt of multi-billion dollar deals also brightened the mood.
US stocks were jubilant at the open on Monday following news that Oracle was lined up to be video-sharing app TikTok’s American partner in a potential sale.
About 55 minutes into trading, the Dow Jones Industrial Average was up 1.4 percent at 28,044.98.
The broad-based S&P 500 climbed 1.7 percent to 3,399.07, while the tech-rich Nasdaq Composite Index — which has struggled in recent sessions amid concerns over excess stock valuations — shot up 2.3 percent to 11,098.90.
Oracle had gained 4.3 percent before trading was halted around 1333 GMT, after the US government confirmed it had received a bid from the company for TikTok’s US operations after the video sharing app’s parent company ByteDance rejected a proposal from Microsoft.
Citing concerns about US data security, President Donald Trump has sought the sale of TikTok from ByteDance, issuing an executive order last month stating that if a purchase agreement was not reached by September 20, the platform would have to close in the United States.
Also gaining was Amazon, which saw a 1.8 percent rise after announcing it would hire 100,000 new employees and open 100 new facilities in the US and Canada.
Pfizer Inc gained 1.1% after the drugmaker and German biotech firm BioNTech SE proposed to expand their Phase 3 pivotal COVID-19 vaccine trial to about 44,000 participants.
Traders are looking ahead to the two-day meeting of the Federal Reserve beginning on Tuesday, in which central bankers may elaborate further on their new average inflation targeting strategy that will keep interest rates lower for longer in a bid to maximize employment.
Also of concern would be any comments made regarding the ongoing deadlock between the White House and Congress on new fiscal stimulus to prop up the American economy as it weathers the coronavirus pandemic.
Nvidia Corp jumped 9.0% on plans to buy UK-based chip designer Arm from Japan’s SoftBank Group Corp for as much as $40 billion, in a deal set to reshape the global semiconductor landscape.
The Philadelphia SE chip index rose 2.6%. The tech 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’re going to have inorganic growth, but you’re going to see growth.”
The S&P 500 is coming off of two straight weeks of losses as investors sold heavyweight technology shares that had powered the benchmark index to record highs in a dramatic recovery from its March lows.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.