Stocks soar on Wall Street on Monday before approaching all-time highsrollercoaster ride from last week.
The S&P 500 rose 1% and recovered within 0.4%it’s an all-time highestablished earlier this month. The Dow Jones Industrial Average rose 358 points, or 0.8%, and the Nasdaq composite was up 1.4% just before noon Eastern Time.
Cleveland-Cliffs helped lead the way with a 24% jump after the steel company’s CEO, Lourenco Goncalves, said it would soon provide details of a potential deal with a major global steelmaker that could mean bigger profits. He also said Cleveland-Cliffs may have found rare earth elements at sites in Michigan and Minnesota.
Such materials have been thrust into the global spotlight after China posted themcurbs its own exportsrare earth elements, a move that President Donald Trump described as hostile earlier this month. Trump’sthe resulting threat of higher tariffsactivated over Chinabig swings for Wall Streetbut concerns subsided somewhat after Trump said tax rates are so highuntenable.
Another source of concern for Wall Street, coming from the banking sector, also appears to be easing. Shares of smaller and mid-sized banks rose on Monday, recovering some of their losses after a few monthsalarm bells were ringinglast week by warning about potentially bad loans they have made.
The revelations had raised questions about whether the growing list of problems is just a collection of one-off issues or a signal of something bigger that threatens the entire industry.
Zions Bancorp. rose 2.5% after last week’s decline of 5.1%. It will report its latest quarterly results after trading ends for the day, and attention will be high after it said it is charging $50 million in loans where it found “apparent misrepresentations and contractual defaults” from borrowers.
This will be a tougher week overall for corporate earnings reports. Big names announcing their latest results include Coca-Cola on Tuesday, Tesla on Wednesday and Procter & Gamble on Friday.
The pressure is on companies to show that their profits are growing as they need to justify the big gains their share prices have made. The S&P 500 is still closeit’s an all-time highwhich was set earlier this month after a scorching 35% rise from April lows.
Achieving bigger profits is one of the easiest ways for companies to sit idlecriticism that stock prices have gone too high. The other is that stock prices are falling.
Corporate earnings reports have also become increasingly important because they provide insight into the strength of the U.S. economythe US government shutdownhas postponedmany important economic updates.
That makes the Federal Reserve’s job more difficult as it tries to decide whether that is the casehigh inflationorthe slowing labor marketis the biggest problem for the economy. Fed officials have indicated they are likely to cut rates several more times next year to boost the economy. But that could be a mistake if inflation worsens, as low interest rates could push prices up even further.
On Friday, the US government will publish an update for inflation in September. The report was expected to arrive earlier this month, and the Social Security Administration needs the figures to calculate cost-of-living adjustments for beneficiaries.
But the government said: “No other releases will be moved or produced until regular government services have resumed.”
On the bond market, government bond yields remained relatively stable. The yield on the 10-year government bond fell to 3.99% from 4.02% at the end of Friday.
Treasury yields have fallen recently, and lower rates help make stock prices look cheaper by encouraging some investors to buy stocks when they would otherwise have bought bonds.
On Wall Street, Amazon shares held steady despite awidespread disruptionfor its cloud computing service that caused disruptions for internet users around the world early Monday. Amazon shares rose 0.8%.
On foreign stock markets, indexes rose in much of Europe and Asia.
Japan’s Nikkei 225 rose 3.4% after the ruling Liberal Democratsnew coalition partner,securing support for its leaderSanae Takaichito become the country’s first female prime minister. Investors expect Takaichi to push for low interest rates, higher government spending and other policies that could help the market.
Indices rose 2.4% in Hong Kong and 0.6% in Shanghai after China reportedeconomy grew by 4.8%on an annual basis in the last quarter, supported by relatively strong exports as companies expanded shipments to markets other than the US
Still, this was the slowest pace in a year. The world’s second-largest economy is still struggling to emerge from a prolonged downturn in the real estate market and encourage consumers and businesses to spend more.
—Stan Choe, AP business writer
AP Business writers David McHugh and Elaine Kurtenbach contributed.
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