WASHINGTON (dpa-AFX) - Stocks showed a lack of direction in early trading on Monday but have moved mostly higher over the course of the session. The major averages have climbed firmly into positive territory, adding to the strong gains posted last week.
Currently, the major averages are hovering near their best levels of the day. The Dow is up 183.87 points or 0.5 percent at 40,843.63, the Nasdaq is up 104.26 points or 0.6 percent at 17,735.98 and the S&P 500 is up 29.46 points or 0.5 percent at 5,583.71.
The strength that has emerged on Wall Street comes as stocks continue to benefit from recent upward momentum, with the major averages extending the upward trend seen over the past several sessions.
The Nasdaq and the S&P 500 are moving higher for the eight consecutive session and have more than offset the steep drop seen early this month.
The buying interest also comes as recent data has eased concerns about the economic outlook while also increasing confidence the Federal Reserve will cut interest rates next month.
According to CME Group's FedWatch Tool, there is a 75.5 percent of a quarter point rate cut next month and a 24.5 percent chance of a half point rate cut.
Later this week, the minutes of the Federal Reserve's latest monetary policy meeting may shed additional light on the outlook for interest rates along with remarks by Fed Chair Jerome Powell and other Fed officials at the Jackson Hole Economic Symposium.
'September is being tipped as the month for that first Fed cut after inflation finally dropped below 3%,' said Danni Hewson, AJ Bell head of financial analysis. 'How far Jay Powell and the FOMC will go, how deep that first cut will be, and whether or not it could be the only one delivered this year are now the questions on investors' lips.'
She added, 'Nerves that the Fed had been too slow have been somewhat allayed, but every word spoken at this week's Jackson Hole Symposium will still be scrutinized.'
In U.S. economic news, the Conference Board released a report showing its reading on leading U.S. economic indicators fell by much more than expected in the month of July.
The Conference Board said its leading economic index slid by 0.6 percent in July after dipping by 0.2 percent in June. Economists had expected the index to decrease by 0.3 percent.
Meanwhile, the report said the index fell by 2.1 percent over the six-month period ending in July 2024, a smaller rate of decline than the 3.1 percent slump over the six-month period between July 2023 and January 2024.
'The LEI continues to fall on a month-over-month basis, but the six-month annual growth rate no longer signals recession ahead,' said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board.
Sector News
Gold stocks have moved sharply higher over the course of the session, driving the NYSE Arca Gold Bugs Index up by 1.9 percent to a two-year intraday high.
The rally by gold stocks comes amid a modest increase by the price of the precious metal, with gold for December delivery inching up $4 to $2,541.80 an ounce.
Significant strength has also emerged among biotechnology stocks, as reflected by the 1.5 percent gain being posted by the NYSE Arca Biotechnology Index. With the increase, the index has reached its best intraday level in almost three years.
Housing, steel and natural gas stocks are also seeing considerable strength on the day, while most of the other major sectors are showing more modest gains.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index tumbled by 1.8 percent, while China's Shanghai Composite Index climbed by 0.5 percent.
Meanwhile, the major European markets all moved to the upside on the day. While the French CAC 40 Index advanced by 0.7 percent, the U.K.'s FTSE 100 Index increase by 0.6 percent and the German DAX Index rose by 0.5 percent.
In the bond market, treasuries have moved higher amid optimism about the outlook for interest rates. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.0 basis points at 3.862 percent.
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