US stocks rose on Monday, with the S&P 500 and the Dow hitting record highs with growth sectors such as technology in favour again as investors appeared to regain confidence in the economy after upbeat comments from Federal Reserve officials.
Nasdaq’s biotechnology index rose 2.5 per cent in its biggest one-day gain since February while the S&P’s health care index had a record-high close.
Amazon.com’s Friday announcement that it would buy Whole Foods and an upbeat tone from Federal Reserve speakers seemed to help reassure investors after the US central bank’s rate hike last week, according to J Bryant Evans, portfolio manager at Cozad Asset Management, in Champaign, Illinois.
“It looks like a bet that interest rates, such as the 10-year yield, are bottoming out,” said Evans. “It’s a resumption of this idea that the economy is in decent shape.”
He added that a “push in M&A tends to propel the market” and that the Amazon/Whole foods US$13.7 billion deal was a “tangible sign the mergers and acquisition environment is pretty good right now.”
The Dow Jones Industrial Average rose 144.71 points, or 0.68 per cent, to end at 21,528.99, the S&P 500 gained 20.31 points, or 0.83 per cent, to 2,453.46 and the Nasdaq Composite rose 87.26 points, or 1.42 per cent, to 6,239.01.