Wall Street hits records as Tesla surges; focus on Fed meeting
Wall Street’s main indexes notched record closing highs on Monday as Tesla shares surged and the energy sector gained while investors looked ahead to a major Federal Reserve meeting later in the week.
The Dow Jones Industrial Average eclipsed 36,000 points for the first time ever during intraday trading, ending just shy of that level.
Accommodative monetary policy has been one of the key supports for the stock market, with the benchmark S&P 500 rising 22.8% so far this year.
The Federal Reserve on Wednesday is expected to approve plans to scale back its $120 billion monthly bond-buying program put in place to help the economy during the coronavirus pandemic, while investors will also be focused on commentary about interest rates and how sustained the recent surge in inflation is.
“This (meeting) is going to be a relatively big deal,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago. “We are expecting to hear the glide path for tapering the bond purchases.”
The Dow Jones Industrial Average rose 94.28 points, or 0.26%, to 35,913.84, the S&P 500 gained 8.29 points, or 0.18%, to 4,613.67 and the Nasdaq Composite added 97.53 points, or 0.63%, to 15,595.92.
Tesla shares jumped 8.5%, helping lift the S&P 500 consumer discretionary sector about 1.5%.
Shares of the electric car maker have charged higher since the company’s market value crossed $1 trillion last week.
Among S&P 500 sectors, energy led the way, rising 1.6%, while the communications services group dropped 0.7%.
The small-cap Russell 2000 index was a standout, rising 2.7% for its biggest daily percentage gain since late August.
A survey on Monday showed U.S. manufacturing activity slowed in October, with all industries reporting record-long lead times for raw materials, indicating that stretched supply chains continued to constrain economic activity early in the fourth quarter.
With over half of S&P 500 companies having reported, third-quarter earnings are expected to have climbed 39%, according to Refinitiv IBES.
“There continues to be positive sentiment around earnings despite some high-profile misses,” said Kristina Hooper, chief global market strategist at investment management firm Invesco.
In company news, Harley-Davidson Inc shares jumped 9.1% after the European Union removed retaliatory tariffs on U.S. products, including whiskey, power boats and company’s motorcycles.
Advancing issues outnumbered declining ones on the NYSE by a 2.84-to-1 ratio; on Nasdaq, a 3.05-to-1 ratio favored advancers.
The S&P 500 posted 46 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 208 new highs and 39 new lows.
About 10.5 billion shares changed hands in U.S. exchanges, compared with the 10.3 billion daily average over the last 20 sessions.