Stocks rose on Monday as the major averages made back some of last week's losses. Progress from Washington on another stimulus package boosted sentiment. A rally in shares of Big Tech fueled stocks' gains as the FAANG names bounced back from a losing week. Silver and gold also outperformed, with the latter hitting a new all-time high.
Monday's market by the numbers
- SPDR S&P 500 (SPY) traded 47.3 million shares, below its 30-day average volume of 88.6 million shares
- The Dow gained 115 points, 0.43%, breaking a two-day losing streak
- Apple had the most positive impact on the Dow, adding 60 points to the index
- The S&P 500 gained 24 points, 0.74%, breaking a two-day losing streak
- The Nasdaq Composite gained 173 points, 1.67%, breaking a two-day losing streak
- The Russell 2000 gained 1.16%, its fourth positive session in five
- Nine of 11 S&P sectors were positive in Monday's session, led by tech, which gained 1.61%
- Utilities was the laggard, down 1.26%. — Christopher Hayes
Dow closes up 110 points, tech leads gains
The market registered solid gains on Monday as major technology companies snapped back from last week's sell-off. The Dow Jones Industrial Average rose about 110 points to end Monday's session, while the S&P 500 gained 0.7%, bringing its 2020 return to 0.2%. The tech-heavy Nasdaq Composite outperformed, climbing 1.6%, as Apple and Netflix jumped 2.3% and 3.1%, respectively. — Yun Li
Tesla rises into the close
Shares of Tesla were up nearly 9% roughly 15 minutes ahead of the closing bell after the stock climbed gradually higher throughout afternoon trading. Monday's market action marks another day of volatile trading for the stock, which dropped more than 6% on Friday. Last week the Elon Musk-led company reported its fourth straight quarter of profits, making the company eligible to join the S&P 500. - Pippa Stevens
Final hour of trading: Stocks rise, led by tech
The major averages were headed for a solid start to a jam-packed week as Apple and Amazon led the gains in Big Tech. The Dow traded 51 points higher, or 0.2%. The S&P 500 climbed 0.6% and the Nasdaq Composite advanced 1.5%. To be sure, investors appeared to be hedging their bets as gold prices surged to an all-time high. —Fred Imbert
Caution is 'warranted' as 'investor greed is present' in this market, MKM says
MKM's JC O'Hara said in a note there are signs that the market could be in trouble moving forward. The firm's chief market technician highlighted "extreme" put/call ratios for two key market indexes, a potential "double top pattern" among the biggest U.S.-listed companies and the recent breakdown of a major tech stock.
CNBC Pro subscribers can read more here. —Fred Imbert
Susan Collins to oppose Shelton, report says
Maine Sen. Susan Collins told The Wall Street Journal that she would vote against the nomination of controversial economist Judy Shelton to the Federal Reserve's Board of Governors. Collins is the second Republican to publicly oppose the nomination, joining Utah Sen. Mitt Romney. With all Democrats in the Senate expected to oppose Collins' nomination, the effort to block President Trump's nominee would need four total Republicans. — Jesse Pound
Here are some of the biggest movers around midday
Walgreens — Shares of the pharmacy operator fell after the company announced CEO Stefano Pessina would step down from his post.
Moderna — The drug maker's stock rose after the company said it received an additional $472 million in government assistance as the biotech company continues work on the development of a potential Covid-19 vaccine.
Biogen — Biogen received a rare double upgrade from a Morgan Stanley analyst who is predicting a 30% rally for the stock over the next year.
Click here to read more. —Fred Imbert
Pullback last week likely a correction in a new bull market, Morgan Stanley says
The S&P 500 suffered its first weekly decline in four last week as many high-flying tech giants retreated, but Morgan Stanley said the pullback is healthy for the new bull market in the long run. "We appear to have entered the painful stage as the leaders take their turn," Mike Wilson, the bank's head of U.S. equity strategy, said in a note. "Ultimately, this is a healthy development for the bull market." Despite last week's small loss, the S&P 500 has risen more than 4% this month, sitting about 5% off its February record high.
"For the broader market, this is likely just a correction in a new bull market," Wilson said. "Despite rising concerns about the recovery, we have high conviction that a new economic cycle and bull market has begun. As such, breadth should expand once confidence in the recovery returns." — Yun Li
Markets at midday: Stocks rise, led by tech
The major averages were slightly higher around midday trading as shares of the major tech companies outperformed. The Dow was up 77 points, or 0.3%. The S&P 500 climbed 0.4%. The Nasdaq Composite traded 0.8% higher. —Fred Imbert
Semiconductor ETF hits new all-time high
The VanEck Vectors Semiconductor exchanged-traded fund (SMH) jumped 3% on Monday, hitting a new all-time high as investors continue to favor the group. The gains were led by Taiwan Semiconductor, which gained more than 10%. Skyworks Solutions, ASML Holding, Xilinix and Teradyne all gained more than 3%. - Gina Francolla, Pippa Stevens
DraftKings sinks amid MLB virus outbreak
Shares of online gambling company DraftKings dropped 7% on Monday as Major League Baseball suffered an outbreak of the coronavirus with one of its teams. The Athletic reported that 14 members of the Miami Marlins team and staff have tested positive for the virus over the past few days, and that the team's Monday game against Baltimore has been canceled. Monday's game between the New York Yankees and Philadelphia Phillies, who just wrapped up a series against the Marlins, has been postponed, according to The Athletic. — Jesse Pound
Gold miner and silver ETFs hit multi-year highs
The iShares Silver Trust (SLV) jumped 7% on Monday to hit its highest level since September 2013. By early morning trading, the exchange-traded fund had already traded more than 22 million shares, more than half of its 30-day average volume of 36.4 million shares. Meanwhile, the VanEck Vectors Gold Miners ETF (GDX) rose 5.5% on Monday to reach its highest level since January 2013. The gains were led by Gold Fields and AngloGold, which both rallied more than 10% Monday. — Yun Li, Gina Francolla
Google extends work-from-home policy until next summer
Google CEO Sundar Pichai told employees in an email that the company's voluntary work from home option has been extended through June 30, 2021 due to the pandemic. Google previously told employees to expect to return to the office in January. The news was first reported by The Wall Street Journal.
"To give employees the ability to plan ahead, we are extending our global voluntary work from home option through June 30, 2021 for roles that don't need to be in the office," Pichai said in the email. — Jesse Pound, Jessica Bursztynsky
Under Armour says it received notice from SEC over sales investigation
The Securities and Exchange Commission sent a potential enforcement action to Under Armour, along with former CEO and current executive chairman, Kevin Plank, and CFO David Bergman, regarding the accounting treatment of sales it booked between the third quarter of 2015 and the fourth quarter of 2016, the company said Monday. Under Armour received the Wells notices from the SEC related to a previously disclosed probe by the agency, the company said in an 8-K filing. Shares of Under Armour rose slightly in early trading on Monday. — Maggie Fitzgerald
U.S. stocks have decoupled from Covid-19 cases, Citigroup says
A group of Citigroup strategists said in a note the U.S. stock market is no longer tracking the number of new coronavirus cases. "Until June, US equities tracked new US Covid cases," they said in a note. "But since then the market has continued to rally recently despite a big increase in US cases." Citigroup did point out, however, the market "could be vulnerable to further lockdowns." The S&P 500 has rallied more than 46% since hitting an intraday low on March 23. —Fred Imbert, Michael Bloom
Biogen gets rare double upgrade from Morgan Stanley, stock up 4%
Biogen popped 4% within the first hour of trading after Morgan Stanley published a rare double upgrade on the equity and advised investors to own the stock. In hiking his rating to overweight from underweight, analyst Matthew Harrison wrote investors aren't giving the company enough credit for its compelling Alzheimer's drug candidate. Despite some near-term pressure, Morgan Stanley believes Biogen is set for a 31% rally over the next year and set a price target for the stock at $357 per share.
CNBC PRO subscribers can read more here. — Thomas Franck
Buybacks hit lowest since 2017, according to Bank of America
The number of companies buying back stock has slowed to its lowest level since the fourth quarter of 2017, according to Bank of America, as corporations tightened their spending habits while the pandemic took hold earlier this year. But the firm also noted that the pace at which companies have suspended their share repurchase programs has also slowed, with "barely any announcements in Jule/July."
Since the beginning of March, just under 100 S&P 500 companies have halted their buyback programs, with the heaviest concentration in consumer discretionary and financials. - Pippa Stevens
Amazon climbing after upgrades
Shares of Amazon jumped 2.7% in the opening minutes of trading after several Wall Street analysts raised their price targets on the stock. Much of the commentary focused on the e-commerce side of the business, which has benefited from the economic restrictions during the pandemic. The company reports its second quarter earnings on Thursday.
Pro subscribers can read more about the new price targets here. — Jesse Pound
Stocks begin the week mixed
Stocks were mixed out of the gate on Monday as the major averages try to make back some of last week's losses, which saw the Dow and S&P 500 snap snap three-week winning streaks.
The Dow fell 14 points for a loss of 0.05%, while the S&P advanced 0.1%. The Nasdaq Composite traded 0.6% higher. Stocks' jump came after Treasury Secretary Steven Mnuchin said the GOP finalized its latest piece of coronavrius-relief legislation. - Pippa Stevens
Strong Apple earnings are priced in, says JPMorgan
Apple reports second quarter earnings on Thursday and after a 30% rally in shares in the past three months, JPMorgan said strong earnings are already priced into the stock. "We believe investors looking for further upside have to focus on the longer-term earnings trajectory rather than expect near-term upside, as the likelihood of an earnings beat in F3Q (Jun) as well as strong early 5G cycle volumes (driving upside to calendar 2H20 estimates) appear to be priced in," JPMorgan analyst Samik Chatterjee told clients. JPMorgan is expecting third quarter earnings of $1.97 per share on revenue of $49 billion for Apple. Analysts on Wall Street are expecting earnings per share of $2.04 on revenue of $52 billion. JPMorgan hiked its 12-month price target on Apple to $425 per share from $365 per share, implying about 13% upside for Apple in the next year.
CNBC PRO subscribers can read more here. — Maggie Fitzgerald
Durable goods orders rose in June, but core durables missed
Orders for long-lasting factory goods rose 7.3% in June for the second consecutive monthly gain as the economy continued to recover from the coronavirus crisis. Economists polled by Dow Jones expected a 5.4% increase. However, core durable goods orders, which exclude the often volatile transportation category, were up 3.3% in June, versus expectations of 3.6% per Dow Jones. —Yun Li
Here are Monday’s biggest analyst calls of the day: Amazon, Qualcomm, Apple, Biogen & more
- Wells Fargo upgraded PulteGroup to overweight from equal weight.
- Morgan Stanley upgraded Biogen to overweight from underweight.
- Pivotal upgraded Wolverine World Wide to buy from hold.
- Bank of America raised its price target on Amazon to $3,280 from $3,000.
- JPMorgan raised its price target on Apple to $425 from $365.
- Wells Fargo raised its price target on Amazon to $3,600 from $3,000.
- Raymond James upgraded American Airlines to market perform from underperform.
- MKM raised its price target on Alphabet to $1,700 from $1,500.
- JPMorgan added Qualcomm to its focus list.
- Goldman Sachs upgraded Kontoor Brands to buy from sell.
- Goldman Sachs upgraded Tapestry to buy from neutral.
Goldman says a weak dollar could give stocks a $300 billion boost
The continuous dollar weakness will lead foreign investors to flock into U.S. equities and stocks with high international sales will benefit the most, according to Goldman Sachs. "We expect foreign investors will buy $300 billion of US equities this year and replace corporations as the largest source of US equity demand," David Kostin, Goldman's head of U.S. equity strategy, said in a note. "Sectors with a high percentage of international sales typically outperform alongside a weakening USD." The dollar will continue to weaken as the rest of the world recovers at a faster pace than the U.S. from the coronavirus crisis, Goldman predicts.
CNBC Pro subscribers can read more here. — Yun Li
Largest Covid-19 vaccine study underway
The largest Covid-19 vaccine study to date got underway on Monday as the National Institutes of Health and Moderna seek to test the efficacy of their experimental vaccine. The study will include 30,000 volunteers. Plans are in place to test potential vaccines from Johnson & Johnson and Novavx later this fall.
Several other possible vaccines, including one developed by Oxford University, have undergone smaller trials. - Pippa Stevens
Gold rises to new all-time high
Gold prices hit a new all-time high on Monday as investors fled to the safe haven asset amid rising tensions between the U.S. and China. Spot gold traded as high as $1,943.927 per ounce, topping its prior record from September 2011.
Gold futures traded 2% higher at $1,938.70 per ounce.
"While we think gold will continue to be supported by rising geopolitical tensions, in our view the primary drivers of the gold price are its negative correlation to real interest rates and the dollar," UBS chief investment officer Mark Haefele wrote in a note to clients Monday. "We think these three factors, in combination with limited supply growth as miners continue to restrain capital spending, will drive gold prices higher," he added. - Eustance Huang, Pippa Stevens
Mnuchin and Kudlow tout GOP's new Covid stimulus, second round of $1,200 checks
Treasury Secretary Steven Mnuchin and White House economic advisor Larry Kudlow on Sunday both touted the latest piece of coronavirus legislation.
Mnuchin, who appeared on "Fox News Sunday," said Republicans have finalized their legislation for a bill worth about $1 trillion and intend to unveil the plan on Monday. Despite the GOP's delay, Mnuchin said Senate leadership and the White House are "completely on the same page" and that the bill would modify the federal unemployment supplement to include about 70% wage replacement instead of the $600 boost in weekly benefits.
Kudlow, during an interview with CNN's "State of the Union," said that the coronavirus relief will include another $1,200 payment to individuals and that the Trump administration will extend the federal eviction moratorium. "The check is there, the reemployment bonus is there. The retention bonus is there," he said. "There will be breaks, tax credits for small business and restaurants."
"It's a very well rounded package," Kudlow said. "It's a very well targeted package." - Thomas Franck
Big Tech higher after losing week
Shares of Big Tech companies moved higher during premarket trading on Monday, following a losing week as investors rotated out of the sector and into some of the names hardest hit by the pandemic.
Amazon shares rose 2%, while Facebook, Apple and Microsoft were all up more than 1%. Alphabet and Netflix each gained about 0.8%.
Tech was the worst-performing S&P 500 sector last week after falling 1.54%, led to the downside by the so-called FAANG stocks.
Facebook, Amazon and Apple all declined more than 5% for the week, while Netflix and Microsoft dropped more than 4%. Alphabet was the relative underperformer, posting a loss of 3.56%. - Pippa Stevens
U.S. index futures point to gains at the open
U.S. stock index futures pointed to gains at the open on Monday, as stimulus negotiations continue in Washington.
The move came after Treasury Secretary Steven Mnuchin said Sunday that Republicans had finalized a bill for about $1 trillion in coronavirus relief funds. The proposal is expected to include another round of $1,200 stimulus checks for Americans and liability protections for businesses and schools, among other provisions.
Elsewhere in the market, gold rose to an all-time high as investors sought out the safe haven asset amid rising tensions between the U.S. and China. - Pippa Stevens