U.S. stocks rose Monday afternoon as investors looked ahead to a week that will deliver important inflation and employment data, following Friday’s cautious take from Federal Reserve Chair Jerome Powell’s Jackson Hole speech.
What’s happening
- The Dow Jones Industrial Average DJIA rose 156 points, or 0.5%, to 34,504.
- The S&P 500 SPX was up 12 points, or 0.3%,at 4,418.
- The Nasdaq Composite COMP advanced 49 points, or 0.4%, to 13,640.
Stocks bounced on Friday, with the S&P 500 and the Nasdaq Composite snapping a string of three straight weekly losses. Meanwhile, the Dow saw an almost 0.5% weekly decline despite finishing higher on Friday.
What’s driving markets
Investors picked up where they left off Friday, when stocks advanced after Powell said the jury was still out on further tightening of monetary policy while underlining that inflation remains too high and indicating that policy makers were ready to further hike rates if deemed necessary.
Jackson Hole recap: Fed rate hikes likely on hold for ‘several meetings’
Powell’s speech at the Fed’s annual summit in Jackson Hole, Wyo., provided the stock market a ”very short-term” green light to press higher, Kent Engelke, chief economic strategist and managing director at Capitol Securities Management, told MarketWatch in a phone interview.
The central bank will be paying close attention to the data set to be released this week. Its preferred inflation measure, the July personal consumption expenditures price index, is due on Thursday, followed by August nonfarm payrolls data on Friday. Fed officials showed no signs of concern over the incoming data, Engelke said. If figures aren’t far out of line with estimates, markets may remain calm in what’s likely to be a lightly traded week.
Powell, meanwhile, kept the possibility of further rate hikes “firmly on the table during his Jackson Hole speech, as inflation still remains above its 2% target, and the central bank is committed to that target,” Rod von Lipsey, managing director at UBS Private Wealth Management, said in emailed comments.
“This week’s core PCE figures and the next [consumer-price index] report in mid-September will be of extra importance in gauging how the Fed may act at its late September meeting,” he said. “Based on the Fed’s continued commitment to curtailing inflation, we believe that the market has been overly optimistic about the end point of restrictive policy rates.”
Elsewhere, Treasury yields BX:TMUBMUSD10Y were softer, with the rate on the 10-year note down around 1 basis point at 4.22%.
In China, stocks climbed after the Finance Ministry and the country’s stock-market regulator rolled out measures to spark buying interest in stocks, such as halving a tax on stock trades and limiting sales by big shareholders in companies that haven’t handed out enough dividends.
China’s CSI 300 index XX:000300 finished with a gain of more than 1%, although well off session highs. Shares of indebted property developer China Evergrande Group 3333,
Companies in focus
- Shares of Dow component 3M Co. MMM,
+5.03% rose 4.9% after The Wall Street Journal reported that the multinational conglomerate was nearing agreement on a roughly $5.5 billion plan to settle more than 300,000 lawsuits over defective military earplugs. - Shares of Rite Aid Corp. RAD,
+9.13% rebounded 5.7% following the worst one-day performance ever for shares on Friday. The selloff followed a report in The Wall Street Journal that the drugstore chain was preparing a chapter 11 bankruptcy filing to address mass federal and state lawsuits that resulted from its alleged role in the sale of opioids. - Shares of Hawaiian Electric Industries Inc. HE,
+43.53% jumped 43% after the electric company responded to a lawsuit filed by Maui County over the deadly Lahaina fires, by calling the suit “factually and legally irresponsible.” - American depositary receipts for Abcam PLC ABCM,
-3.27% fell 3.3% after it said it agreed to be acquired by Danaher Corp. DHR,+1.92% for $24 a share in cash in a deal that values the maker of antibodies and reagents for drug-discovery efforts at about $5.7 billion including debt. The price amounts to a premium of 64 cents a share, or 2.7% over its closing price of $23.36 on Friday. Danaher shares rose 1.7%.
Barbara Kollmeyer contributed.
