US stocks end higher as megacaps rally
US stocks rose on Monday with megacap growth shares, extending the market's recent rally amid investor optimism the Federal Reserve can achieve a soft landing for the economy. Shares of Apple Inc climbed 0.6 percent, while Microsoft Corp rose 0.5 percent and Tesla Inc jumped 3.1 percent. Those stocks gave the S&P 500 and Nasdaq their biggest boosts as US Treasury yields eased. China's central bank cut key lending rates in a surprise move to revive demand after the economy unexpectedly slowed in July. Consumer staples and utilities sectors also had strong gains. The S&P 500 has rebounded sharply since mid-June, helped last week by signs that inflation may have peaked in July. The benchmark remains down about 10 percent since December 31. "Market participants (are) looking at the Fed and saying, 'Hey, they're going to be cutting rates here sooner than we know, and that's going to be good for the equity market,'" said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago. The Dow Jones Industrial Average rose 151.39 points, or 0.45 percent, to 33,912.44, the S&P 500 gained 16.99 points, or 0.40 percent, to 4,297.14 and the Nasdaq Composite added 80.87 points, or 0.62 percent, to 13,128.05. The Fed since March has delivered a stiff set of interest rate increases in an effort to battle inflation. Some investors have worried that an aggressive pace of rate hikes by the US central bank could push the economy into recession. Higher interest rates can depress stock multiples, especially of technology and other growth stocks. The S&P 500 value index underperformed the S&P 500 growth index on the day. The S&P 500 energy index was down 2 percent. Quarterly reports from big retailers are expected this week and will round out the second-quarter reporting period. Results from Walmart Inc and Home Depot Inc are due before the bell on Tuesday. Walmart was up 0.3 percent while Home Depot was nearly flat. Target Corp is also due to report quarterly results this week. Estimated earnings growth on the second quarter for S&P 500 companies has improved since July 1, and news from US companies has mostly surprised investors, who had been bracing for a gloomier outlook on both businesses and the economy. US-listed shares of China's e-commerce giant Alibaba Group Holding Ltd slipped 0.6 percent. Volume on US exchanges was among the lowest so far this year. About 9.59 billion shares changed hands, compared with the 10.97 billion average for the full session over the last 20 trading days. Advancing issues outnumbered declining ones on the NYSE by a 1.09-to-1 ratio; on Nasdaq, a 1.38-to-1 ratio favoured advancers. The S&P 500 posted 9 new 52-week highs and 29 new lows; the Nasdaq Composite recorded 82 new highs and 27 new lows. (Reuters)