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Wall Street Rises on Prospect of Extended Stimulus, Earnings; Dow up 130 Pts

Stock MarketsAug 02, 2021 09:36AM ET
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© Reuters.

By Geoffrey Smith 

Investing.com -- U.S. stock markets opened higher on Monday on expectations of sustained levels of monetary stimulus in the U.S. and the continuation of a broadly positive second-quarter earnings season. 

By 9:35 AM ET (1335 GMT), the Dow Jones Industrial Average was up 132 points, or 0.4%, at 35,068 points. The S&P 500 and the Nasdaq Composite were both up 0.5%. 

Over the weekend, Federal Reserve board member Lael Brainard had repeated the central bank's message that the labor market was still too far from its pre-pandemic condition of health for the Fed to reduce its asset purchases, while both she and noted 'dove' Neel Kashkari at the Minnesota Fed warned about possible headwinds from the spread of the Covid-19 virus. 

Sentiment was also helped by news over the weekend that Chinese regulators were seeking dialogue with the Securities and Exchanges Commission over the issue of Chinese listings in the U.S.  A barrage of regulatory measures by Beijing has created a strong impression recently that the Communist Party was increasingly hostile to the idea of Chinese companies reporting data to U.S. regulators.  Expectations of fresh stimulus from China are also high after last week's Politburo meeting and further evidence of the manufacturing sector slowing down in July. The Caixin PMI fell to its lowest since April 2020, according to figures released overnight.

News that the U.S. Senate had reached agreement on a draft of a bipartisan $1 trillion infrastructure was also received positively, albeit with the caveat that the bill is likely to be held up in the House of Representatives.

BioNTech stock and Moderna stock stood out as early winners, after a weekend report by the Financial Times that the two, along with BioNTech's partner, Pfizer (NYSE:PFE), had secured substantial price increases in big new contracts to supply the European Union with Covid-19 vaccines. BioNTech (NASDAQ:BNTX) gained 5.0% and Moderna (NASDAQ:MRNA) stock gained 1.2%.

Square (NYSE:SQ) stock reversed premarket losses to rise 7.3% after announcing that it will buy Australian fintech Afterpay with stock valued at $29 billion. Initial responses to the news had suggested fears that Square had overpaid. In other M&A news, Parker-Hannifin (NYSE:PH) stock rose 1.8% after its $8 billion bid for U.K. defense group Meggitt  (OTC:MEGGY) was approved by the latter's board.

The ADRs of Chinese electric car manufacturers were also higher after a series of monthly deliveries numbers for July that saw all of them ramping up sales as planned. BYD (OTC:BYDDY) ADRs rose 7.2%, while Xpeng (NYSE:XPEV) ADRs rose 6.0% and Li Auto (NASDAQ:LI) ADR rose 5.5%. Nio (NYSE:NIO)ADRs rose 2.6%.

 

Wall Street Rises on Prospect of Extended Stimulus, Earnings; Dow up 130 Pts
 

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Comments (11)
Stan Smith
Stan Smith Aug 02, 2021 1:41PM ET
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Stimulus 'injections' indicate a sick and desperate economy. How and why that is good for stocks I'll never understand
Bernard Madoff
Bernard Madoff Aug 02, 2021 12:58PM ET
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When the Tesla will reach  $800 we will  set 1B short.
Terence Williams
Terence Williams Aug 02, 2021 12:09PM ET
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Who writes these headlines..who knows why the market moves..yet we get these headlines..bs.
Michael Angelo
Michael Angelo Aug 02, 2021 12:08PM ET
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The $kam is real. The Fed and govt will continue to print until unemployment, that is a lagging indicator, changes. Everybody knows that when it changes is late and probably the economy is overheating. But using that excuse they have chosen the best lie to keep issuing money and keep the country afloat. And when they finish will QE will start with Infrastructure... The only truth is that they don't know what to do, both sides.
Casino Crypt
CasinoCrypt Aug 02, 2021 12:08PM ET
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Interesting - uncertainty drives the markets higher. The poor data for jobs and factories in China drives the markets higher. It seems like a win win era. Markets are fully decoupled from the ground data.
neang aee 냥에
neang aee 냥에 Aug 02, 2021 11:59AM ET
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Ask more stimulus for more suicides of wealth
Ben Chod
Ben Chod Aug 02, 2021 11:35AM ET
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Heard the one about the heroin addict who walked into wallstreet. He wad offered a free all time high!
Mark Stallone
Mark Stallone Aug 02, 2021 11:34AM ET
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Print Print Print Print Print. What could go wrong? oh yeah.. We're living it.
Mitchel Pioneer
Mitchel Pioneer Aug 02, 2021 10:10AM ET
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The biggest investment joke in the world stays on its fraudulent path of manufactured "gains," as average holdings in retirement plans get taken to even higher levels.  The legalized financial defiling of America continues.
Yoyogi Shark
Yoyogi Shark Aug 02, 2021 10:05AM ET
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Record earnings, record prices of everything everywhere and they keep stimulating demand. Yet we literally can't do anything about it. Where are all defenders of freedom and democracy now? That's right, they are part of this scheme.
CHADWICK RICHINGTON
CHADWICK RICHINGTON Aug 02, 2021 9:51AM ET
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So do we just have endless stimulus?
John Avenetti
John Avenetti Aug 02, 2021 9:51AM ET
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no. it's a plan to bankrupt the west. never read the Bible but oddly it says in the end we'll be on a one world currency. there this seems to be going. and in the final days you need the mark of the beast to transact in business. The name of the tracking ink is called LUCIFERase. Check it out.
Ronald Warren
Ronald Warren Aug 02, 2021 9:51AM ET
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