The Dow Jones Industrial Average rose Monday as investors kicked off a week with more corporate earnings and key inflation readings.
The blue-chip average added 407.51 points, or 1.16%, to close at 35,473.13. It was the best day since June 15 for the Dow. The 30-stock index was helped by Amgen's nearly 4% rally.
The S&P 500 advanced 0.9% to close at 4,518.44. The Nasdaq Composite rose just 0.61% to 13,994.40, with gains restricted by a nearly 1% slide in Tesla following news of CFO Zach Kirkhorn stepping down.
Both the Nasdaq and the S&P 500 ended four-day losing streaks.
Berkshire Hathaway climbed more than 3%, signaling investor satisfaction with the company's earnings report and cash stockpile. Both A and B share classes of Berkshire Hathaway closed at record levels on Monday.
Animal health care stock Elanco rallied 4% after beating Wall Street expectations, while Tyson Foods slid 3.8% on an underwhelming report.
Sovos Brands, the company known for Rao's, surged more than 25% after Campbell Soup announced it would acquire the pasta sauce maker. Campbell Soup slipped around 1.8%, bringing shares to their cheapest price in more than a year.
The moves follow a losing week on Wall Street. The Nasdaq Composite and S&P 500 slid about 2.9% and 2.3%, respectively, marking their worst weeks since March. The Dow finished the week 1.1% lower.
Monday kicked off the latest leg of what has broadly been considered a stronger corporate earnings season than anticipated. Of the 85% of companies in the S&P 500 that have posted their quarterly results, about four-fifths have exceeded Wall Street forecasts, according to FactSet.
"Markets are back on to a risk-on mode," said Chris Zaccarelli, chief investment officer of the Independent Advisor Alliance. "It's been a better-than-expected earnings season, and so I think that's why the market's had such staying power."
Later in the week, investors will shift focus to the release of July consumer and producer price index data. Both are closely watched given their connection to the path of inflation and the health of the economy.
The three major indexes finished Monday's session up.
The Dow finished nearly 1.2% higher. It's the best daily performance for the 30-stock index since June 15.
The S&P 500 added 0.9%, while the Nasdaq Compose rose 0.6%. With the close, both indexes snapped four-day losing streaks.
— Alex Harring
Ark Invest CIO Cathie Wood was complimentary of departing Tesla CFO Zack Kirkhorn on Monday, but said she believes that Kirkhorn "trained his successor well."
"We will miss him, but his successor has been at Tesla right underneath him ... So he was put through the fires," Wood told Bloomberg News.
New CFO Vaibhav Taneja has been at Tesla since 2017, and previously worked for the Musk-backed SolarCity and accounting firm PwC.
Tesla is the biggest holding in Wood's Ark Innovation ETF (ARKK), with a market value of more than $800 million. Shares of Tesla were down 1.6% in afternoon trading.
— Jesse Pound
Yields on three-month and six-month Treasurys are promising, but now is a good time to add longer-dated bonds, said Kristen Bitterly, Citi Global Wealth Head of North America Investments.
Both of those T-bills are yielding upward of 5.4% on Monday afternoon.
"It's undeniable that the short-end of the curve, those are really attractive yields," Bitterly said on CNBC's "Closing Bell." "But now you have all of a sudden, with some of the dialogue, you have real reinvestment risk."
She noted that while short-term T-bills might be fine for cash holdings, investors building a diversified income strategy might want to lock in five-year yields at these levels. The yield on the 5-year Treasury note was at 4.16% Monday afternoon.
— Darla Mercado
Ed Morse, Citi's global head of commodities, believes last week's plunge in U.S. oil inventories won't stretch past the third quarter of this year.
In the week ending July 28, U.S. Crude inventories plunged by 17 million barrels. However, WTI Crude and ICE Brent Crude ended last week with six straight weeks of gains for the first time since June 2022 and February 2022, respectively.
"We definitely think there is going to be incremental supply in the fourth quarter," Morse said, adding that crude oil supplies after September will come from a variety of countries, such as those in OPEC, that have greater efficiency with production and drilling rates.
Consumers are still able to absorb higher gas prices this year, Morse said. He noted that while U.S. gasoline demand in June went up, however, the weekly numbers in July showed otherwise — which he said could potentially be a reaction to higher oil prices, shifting consumer habits, and an increased efficiency in vehicles.
Morse noted two major changes in consumers' gasoline usage:
— Pia Singh
EchoStar surged more than 21% after Raymond James said there could be big gains ahead for satellite services company.
Analyst Ric Prentiss upgraded share to strong buy from outperform in a Monday note.
"We think the company is positioned very well at a critical juncture for the U.S. Satellite industry, driven by [a] significant strong balance sheet with $1.7B in cash and -$0.2B in net debt, and significant fallow S-Band spectrum holdings," Prentiss said.
To read more about his upgrade, click here.
— Hakyung Kim
Raymond James analyst Patrick O'Shaughnessy laid out the case for a Charles Schwab turnaround in a note to clients on Monday.
"This rebound will be driven by continued healthy client asset growth and a recovery in Schwab Bank's net interest margin ... The rebound hinges on the continued wind down of client cash sorting, which in turn will allow Schwab to repay expensive short-term funding sources and eventually begin to reinvest its securities portfolio at higher yields," the note said.
Schwab reported 75 cents in adjusted earnings per share for the second quarter. Raymond James projects that will jump to 94 cents per share in the second quarter of 2024.
Shares of Schwab are down about 21% year to date.
— Jesse Pound
DraftKings shares have already rallied more than 179% year to date — but further updates could be ahead with more upward EBITDA revisions, according to Well Fargo. The firm upgraded shares to overweight from equal weight.
Analyst Daniel Politzer forecasts the company reaching $1 billion in adjusted EBITDA after the company's better-than-expected quarterly earnings announcement last Thursday.
To read more about his upgrade, click here.
— Hakyung Kim
Investors took risk off in both stocks and high yield bonds in the first week of August, according to Jefferies.
"We saw outflows from both equities & fixed income with only 42 of 103 funds we track taking in money. Most notable for us was the $1B withdrawal from HY, and that brings the recent total to $1.7B," Jefferies strategist Steven DeSanctis said in a note to clients.
The iShares iBoxx $ High Yield Corporate Bond ETF (HYG) is down about 1% in August.
— Jesse Pound
The three major indexes continued trading higher as investors geared up for the final hour before the market closes.
The Dow was up around 400 points, or 1.2%. The S&P 500 gained 0.8%, while the Nasdaq Composite added 0.4%.
— Alex Harring
It might not feel like it, but more energy stocks are trading above their 200-day moving averages today than technology stocks (87% to 80%), according to Strategas Securities technical analyst Chris Verrone in a note out early Monday. The same is true when looking at the percentage of stocks selling above their 50-day moving average (100% to 56%).
"Energy has regained the momentum in this market," Verrone said. Last week, September West Texas Intermediate contracts rose to their highest since April and rallied for a sixth straight week for the first time since June, 2022. October Brent contracts advanced for a sixth week for the first time since February, 2022.
Meanwhile, Strategas noted that, "for the first time since January, both AAPL and MSFT are below the 50-day moving average. The market continues to look corrective, as its two largest weights demonstrate."
Separately, Bank of America analysts led by Doug Leggate on Monday highlighted strength in exploration and production companies that focus on natural gas rather than crude oil, and said their favorite picks are Southwestern Energy, EQT Corp., Range Resources and Chesapeake Energy.
— Scott Schnipper, Michael Bloom
Last week's retreat for stocks could be the start of a late-summer swoon, according to chart analysts on Wall Street.
Oppenheimer technical analyst Ari Wald said in a weekend note to clients that the market appears to be entering a "textbook seasonal correction."
"We show the S&P 500 typically bottoms in late August in a pre-election year," Wald said.
Check out more technical analysis on CNBC Pro.
— Jesse Pound
Sage Therapeutics tumbled more than 50% after the Food and Drug Administration approved one of its oral drugs for postpartum depression, but not for major depressive disorder.
The drug, zuranolone, would have had a bigger potential market if approved for the latter. The FDA's approval late Friday made zuranolone the first oral treatment for postpartum depression, a common complication for women during and after pregnancy that can hamper their ability to function normally.
Meanwhile, Biogen, which jointly developed the treatment with Sage, rose modestly.
— Annika Kim Constantino
Treasury yields could fall over the next six to nine months as the economy slows thanks to the Federal Reserve's interest rate hikes, according to Wolfe Research chief investment strategist Chris Senyek.
"I think with respect to the interest rates, it's too full. ... I think long rates move higher over the short-term into just a supply glut from Treasury issuance and into an economy that remains very resilient," Senyek told CNBC's "Squawk on the Street" on Monday. "I think as we get six to nine months out, yields will be a lot lower on the long end because the economy is going to slow."
He added that the yield on the 10-year Treasury could fall as low as 3.6% before the end of the year.
— Brian Evans
Despite the overhang of the Hollywood labor strikes, "a significant bull case remains" for Cinemark, according to Morgan Stanley. The firm said the July box office-boom from the dual release of "Barbie" and "Oppenheimer" squashes the theatrical bear case despite ongoing uncertainty from the dual labor strikes.
"Balancing the permanence of the good news with the transience of the bad news keeps us OW," analyst Benjamin Swinburne said in a Monday note.
The stock was up more than 2% in afternoon trading.
CNBC Pro subscribers can read more about his call here.
— Hakyung Kim
Disclaimer: NBCUniversal owns CNBC and Universal Pictures, the studio behind "Oppenheimer."
A group of underperforming technology stocks has held back the S&P 500 on Monday.
Information technology was the only down sector of the 11 in the S&P 500 in the session. While the broad index was up about 0.7% as a whole, the sector shed around 0.2%.
Enphase Energy was the worst performer in the sector, down nearly 4.5%. Qualcomm, Apple and Palo Alto Networks were also among the biggest laggards, with each down more than 2%.
Meanwhile, communication services was the best performing sector, up almost 1.7%. Financials followed with a 1.4% advance.
— Alex Harring
Bank of America is bracing for a more muted response to Nvidia earnings after the chipmaker's previous blowout report.
"After last quarter's shock-and-awe report, we expect the sentiment to be bit more measured," wrote analyst Vivek Arya in a note to clients. "Demand isn't the issue, its supply (packaging, memory) and importantly the pace with which US cloud service providers (CSP) are able to set up genAI compute instances."
While Arya maintained the Wall Street firm's buy rating and $550 price target, and sees a multi-year runway for share from AI, he expects supply and operational constraints to potential hinder the upside for shares.
For the report itself, Arya anticipates inline or modestly higher sales, up 64% on a year-over-year basis. He also expects an acceleration in the third quarter, with a bull case accounting for a more than 100% uptick in sales from a year ago.
Bank of America's price target implies 23% upside for shares from Friday's close.
— Samantha Subin
Check out some of the companies making headlines in midday trading:
Read the full list here.
— Brian Evans
The equity market could see more volatility approaching, according to Chris Harvey, head of equity strategy at Wells Fargo Securities.
"Earnings season is more or less over and the macro begins to take over, so we could see volatility really start to ratchet up a little bit higher," Harvey told CNBC's "Squawk on the Street."
"Don't expect it until you see rates begin to come down. I don't think volatility in the equity market is going to come down just yet," he continued.
— Hakyung Kim
Despite the Dow's climb in Monday trading, Apple and a handful of other stocks restricted gains for the blue-chip average.
Apple was the worst performer in the 30-stock index, down more than 2% as investors continued contemplating the big technology company's earnings report last week.
Just one-fifth of stocks in the index traded down. Verizon was the next worst performer, shedding around 1% in Monday's session.
On the other end of the spectrum, Amgen led the Dow higher with an advance of around 3%. Boeing, Dow, Inc. and Johnson & Johnson were also among the top performers, with each trading more than 2% higher.
— Alex Harring
Guggenheim raised its rating on Fortinet to buy from neutral in a Sunday note, saying it's "taking advantage of the digestion period" on shares.
The stock rose modestly in morning trading. Shares last tumbled 25% on Friday following a mixed second-quarter earnings report.
"While we recognize Fortinet faces several headwinds heading into the second half of the year, we do not believe the company is structurally impaired, nor do we believe its competitive positioning has deteriorated," McDonough said. "On the contrary, when we first launched coverage of the company in January, we underscored our views that Fortinet is a high-quality technology company with a sustainable moat – and those views have not changed."
More about his upgrade can be found here.
— Hakyung Kim