(Reuters) – Wall Street’s main indexes edged higher on rising expectations of monetary stimulus from global central banks to boost growth, while a drop in technology and healthcare stocks kept a check on gains.
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., September 5, 2019. REUTERS/Brendan McDermid
The drugmaker fell 2.75% after analysts raised questions about data on the company’s lung cancer drug, dragging the healthcare sector .SPXHC down 0.9%.
Federal Reserve Chairman Jerome Powell said late last week the central bank would “act as appropriate” to sustain economic expansion, a phrase that financial markets have read as signs of an interest rate cut.
The Fed cut interest rates for the first time since 2008 in July. Bets of another cut rose after data on Friday showed the U.S. economy added fewer-than-expected jobs in August.
Traders see a 91.2% chance of a quarter percentage point cut in the Fed’s September policy meeting, up from 90% on Friday, according to CME’s FedWatch. The European Central Bank is also expected to cut rates later this week.
The S&P 500 added to its positive momentum on Monday by breaking out of its August trading range late last week, said Shawn Gibson, Chief Investment Officer of asset management firm Liquid Strategies in Atlanta.
Escalating Sino-U.S trade tensions and the inversion of a key part of the U.S. yield curve drove the sell-off in August. However, Monday’s gains pushed the S&P 500 to just 1.5% below its record high.
“Barring any surprise news, this should be a quiet week in the equity market as most investors are on hold until next week for the FOMC (Federal Open Market Committee) meeting,” Gibson said.
Communication services .SPLRCL were lifted by AT&T Inc’s (T.N) 4.30% gain after shareholder Elliott Management Corp disclosed a $3.2 billion stake in the company and pushed for changes.
Shares of Fred’s Inc (FRED.O) plunged 40.84% to a record low after the discount retailer said it filed for Chapter 11 bankruptcy protection.
Boeing Co (BA.N) fell 1.17% after it suspended load testing of its new widebody 777X aircraft over the weekend as media reports said a cargo door failed in a ground stress test.
At 10:21 a.m. ET, the Dow Jones Industrial Average .DJI was up 85.35 points, or 0.32%, at 26,882.81, the S&P 500 .SPX was up 5.05 points, or 0.17%, at 2,983.76 and the Nasdaq Composite .IXIC was down 2.97 points, or 0.04%, at 8,100.11.
Advancing issues outnumbered decliners by a 1.63-to-1 ratio on the NYSE and by a 1.31-to-1 ratio on the Nasdaq.
The S&P index recorded 29 new 52-week highs and one new low, while the Nasdaq recorded 36 new highs and 33 new lows.
Reporting by Uday Sampath in Bengaluru; Editing by Arun Koyyur and Saumyadeb Chakrabarty