The San Juan Daily Star
Nasdaq, S&P 500 rise amid fresh round of debt talks; Micron slides
The S&P 500 and the Nasdaq rose on Monday as markets awaited updates on a fresh round of talks about raising the U.S. debt ceiling, while shares of Micron fell after China’s ban on its memory chips.
President Joe Biden and House Republican Speaker Kevin McCarthy will meet for talks on Monday after their discussions almost fell apart on Friday. The fresh talks come less than two weeks before a deadline after which the Treasury warned that the federal government will struggle to pay its debts.
A default would cause chaos in financial markets and spike interest rates.
“Everybody is paying attention to this Kevin McCarthy-Joe Biden meeting, waiting for some kind of signal as far as the debt ceiling is concerned,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.
“People are just waiting and watching to see how this plays out.”
In a move that was perceived as ramping up trade tensions between Beijing and Washington, China barred chipmaker Micron Technology Inc MU.O from selling memory chips to key domestic industries, sending its shares down 4.5%.
The Philadelphia SE Semiconductor index .SOX dipped 0.4%.
Apple Inc AAPL.O slipped 0.4% after a report that Loop Capital downgraded the iPhone maker’s stock to “hold” from “buy”. This marked its first rating cut in five months, according to Refinitiv data.
At 10:14 a.m. ET, the Dow Jones Industrial Average .DJI was down 96.82 points, or 0.29%, at 33,329.81, the S&P 500 .SPX was up 1.64 points, or 0.04%, at 4,193.62 and the Nasdaq Composite .IXIC was up 46.62 points, or 0.37%, at 12,704.52.
Dow component Chevron CorpCVX.N fell 1.7% as the oil major said it would acquire PDC Energy Inc PDCE.O in an all-stock transaction for $7.6 billion, including debt.
PacWest BancorpPACW.O rose 6.3% after the regional lender entered into an agreement to sell a portfolio of 74 real estate construction loans to a subsidiary of Kennedy-Wilson Holdings Inc KW.N.
Investors will look for clues on the monetary policy path from a slew of Federal Reserve speakers and key data points this week such as the April personal consumption expenditure (PCE) index and durable goods.
The PCE index reading, considered to be the Fed’s preferred inflation gauge, is due on Friday.
Minneapolis Fed President Neel Kashkaritold CNBC in an interview that it was a “close call” on whether he would vote to raise rates at the Fed’s June meeting or take a pause, while St. Louis Fed chief James Bullard said the central bank might have to hike rates by 50 basis points this year.
Advancing issues outnumbered decliners by a 1.71-to-1 ratio on the NYSE and by a 1.78-to-1 ratio on the Nasdaq.
The S&P index recorded 13 new 52-week highs and three new lows, while the Nasdaq recorded 46 new highs and 35 new lows.
“The fact is, nobody really knows what to make of it. The American sovereign debt is intermeshed throughout our entire financial system, so it is really impossible to know what will happen in the case of a default,” Russell added.
U.S. Treasury Secretary Janet Yellen urged Congress to raise the federal debt limit and warned that a default could have severe repercussions on the global economy.
At 12:20 p.m. ET, the Dow Jones Industrial Average was down 253.51 points, or 0.76%, at 33,277.82, the S&P 500 was down 11.99 points, or 0.29%, at 4,125.65, and the Nasdaq Composite was up 9.68 points, or 0.08%, at 12,316.12.
The Nasdaq was boosted by a 5% rise in shares of Alphabet Inc after Google rolled out more artificial intelligence products on Wednesday to take on competition from Microsoft Corp.
The S&P 500 communication services index, housing the stock, rose 2.1% and hit a near nine-month high and among rare gainers on the day.
Tapestry Inc jumped 8.6% as it raised its annual profit forecast.
Declining issues outnumbered advancers for a 2.76-to-1 ratio on the NYSE and for a 1.85-to-1 ratio on the Nasdaq.
The S&P index recorded four new 52-week highs and 13 new lows, while the Nasdaq recorded 48 new highs and 161 new lows.