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S&P 500, Nasdaq gain as Nvidia jumps 6%, leading megacap stocks higher

2023-08-15 02:52
By Amruta Khandekar and Saeed Azhar (Reuters) -The S&P 500 and the Nasdaq rose on Monday as a surge in
S&P 500, Nasdaq gain as Nvidia jumps 6%, leading megacap stocks higher

By Amruta Khandekar and Saeed Azhar

(Reuters) -The S&P 500 and the Nasdaq rose on Monday as a surge in chipmaker Nvidia jumped 6.4% following a bullish note from Morgan Stanley, leading other megacap growth stocks higher as investors awaited earning reports from U.S. retailers.

Nvidia's gain pushed the information technology index up 1.6%, making it the strongest of 11 S&P 500 sector indexes.

Other megacap growth stocks including Alphabet climbed over 1% and Amazon.com rose over 0.8%, while chipmaker Micron Technology gained 5.7%.

"It's the first day in a while that tech has really significantly outperformed," said Jay Hatfield, CEO of Infrastructure Capital Advisors in New York.

"That's indicative of the fact that you have this blockbuster Nvidia report coming up and that could support the tech market pretty substantially."

Nvidia, whose chips power artificial intelligence which has driven this year's tech stocks rally, is due to report quarterly results next week.

"NVIDIA remains our top pick, with a backdrop of the massive shift in spending towards AI, and a fairly exceptional supply-demand imbalance that should persist for the next several quarters," Morgan Stanley analysts said in a note on Monday.

The Nasdaq and S&P 500 fell last week after hotter-than-expected U.S. producer prices data fanned concerns that the Federal Reserve could keep U.S. interest rates higher for longer.

Tesla bucked the upward trend, falling almost 2% after the electric automaker said it had cut prices in China for some Model Y versions.

Market focus this week will be on quarterly earnings from major U.S. retailers including Walmart and Target. Expected economic data includes retail sales for July that will shape expectations for the direction for U.S. interest rates.

Traders see a nearly 89% chance that the Fed will keep its interest rates unchanged next month, according to CME Group's Fedwatch tool.

Goldman Sachs' latest report said its baseline forecast calls for the Fed to start cutting the funds rate in

the second quarter of 2024.

Keeping a lid on global market sentiment were concerns about China's highly leveraged property sector after the country's top private property developer, Country Garden, sought to delay payment on a private onshore bond for the first time.

In afternoon trading, the S&P 500 was up 0.30% at 4,477.26 points.

The Nasdaq gained 0.64% to 13,731.50 points, while the Dow Jones Industrial Average was down 0.12% at 35,237.43 points.

PayPal Holdings added nearly 2.2% after the company named Alex Chriss, a top executive at tax-preparation software firm Intuit, as its new chief executive officer.

AMC Entertainment common shares tumbled 34% after a Delaware judge approved the theater chain's revised stockholder settlement on Friday. The company's preferred stock surged 17%.

Hawaiian Electric Industries shares plunged nearly 40% to more than 13-year lows amid growing scrutiny over whether the utility company's equipment played any role in the deadly wildfires that burnt through the coastal Maui town of Lahaina.

Declining stocks outnumbered rising ones within the S&P 500 by a 1.4-to-one ratio.

The S&P 500 posted eight new highs and 10 new lows; the Nasdaq recorded 45 new highs and 180 new lows.

(Reporting by Amruta Khandekar and Shristi Achar A in Bengaluru and Saeed Azhar in New York; Editing by Arun Koyyur, Maju Samuel and David Gregorio)