By Yasin Ebrahim
Investing.com – The Dow cut its losses on Monday as a surge in technology and healthcare stocks helped offset weakness in financials, led by banking stocks amid expectations for U.S. rates to fall into negative territory next year.
The Dow Jones Industrial Average was flat, the S&P 500 gained 0.32%, while the Nasdaq Composite added 1.17%.
FAANG stocks kicked off the week on a positive footing as investors continued to bet these companies sporting solid balance sheets and demand are seemingly better set up for the uncertainty ahead amid efforts globally to lift restrictions.
Chip stocks also supported a move higher in broader tech, powered by a jump in shares of Nvidia (NASDAQ:NVDA) following a price target raise on Wall Street.
Nvidia rose more than 3% after Needham boosted its price target on the stock to $360 from $270 on expectations that increased demand for gaming and an uptick in data center spending will boost performance.
Health care stocks were also in the ascendency, led by Gilead Sciences (NASDAQ:GILD) up 4%, Moderna (NASDAQ:MRNA) was up 10%, with both companies leading the pack of drugmakers in the race for potential therapies and vaccines to treat Covid-19.
The rise in tech helped keep a lid on losses after banking stocks came under pressure as investors bet the Federal Reserve's benchmark rate will turn negative by April next year.
JPMorgan (NYSE:JPM) fell 2.2%, Bank of America (NYSE:BAC) slipped 3.6% and Citigroup (NYSE:C) was down 4.7%.
Lower interest rates weigh on a bank's net interest margin, the difference between the interest income generated by banks and the amount of interest paid out to their lenders.
On the earnings front, Under Armour (NYSE:UAA) slumped about 10% after reporting that first-quarter sales fell 23% as the Covid-19 pandemic forced the retailer shuttered its stores.
Marriott International (NASDAQ:MAR) fell 4.4% after missing first-quarter earnings estimates as the pandemic has halted travel and tourism demand.