FILE - In this Jan. 3, 2020 file photo, the Wall St. street sign is framed by American flags flying outside the New York Stock Exchange in New York. U.S. stocks are swinging between losses and gains in Thursday, Sept. 24, trading, as volatility continues to be the dominant force in Wall Street’s tumultuous September. (AP Photo/Mary Altaffer, File)

US stocks start September off with more gains, led by tech

September 01, 2020 - 3:09 pm

Stocks are closing higher on Wall Street Tuesday, a day after wrapping up their fifth monthly gain in a row. Technology companies were once again a standout. The S&P 500 climbed 0.8% after starting the day slightly in the red. The Nasdaq rose 1.4%. Zoom Video Communications soared more than 40% a day after the now-ubiquitous video conferencing service reported another quarter of explosive growth. This is a busy week for economic news, culminating Friday with the monthly U.S. jobs report. Tesla gave back some of its recent gains after saying it would sell up to $5 billion in stock.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story appears below.

Wall Street shook off a sluggish start and was moving higher in afternoon trading Tuesday, a day after the market wrapped up its fifth monthly gain in a row.

The S&P 500 was up 0.5%, as more strength in technology stocks and gains in retailers and other companies that rely on consumers offset declines in health care, utilities and financial companies. Treasury yields fell slightly.

Despite the early stumble, the latest gains have the S&P 500 on pace to for another record-high close after setting several new highs last month.

Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, said stocks “have fast become a buy high, sell higher market, and for good reason.” Sandven said investors are right to take a “glass half full” view of the strengths underlying the market, which could continue to trend upward.

The Dow Jones Industrial Average was up 112 points, or 0.4%, to 28,542 as of 2:22 p.m. Eastern time after waffling between small gains and losses in the early going. The Nasdaq was up 1.2% a day after closing at an all-time high.

The stock market has continued its remarkable turnaround since plunging nearly 34% early this year as the coronavirus pandemic knocked the economy into a recession. The S&P 500 closed out August with a 7% gain, its best showing since April. It’s now up 8.9% this year, while the tech-driven rally has powered the Nasdaq to a gain of more than 32%.

Encouraging data as broad swaths of the economy have reopened this summer have helped stoke investor optimism about a recovery. The question is whether that’s going to be enough to keep the market moving higher when so much uncertainty remains about the pandemic’s lasting impact on companies and consumers.

Stocks perked up Tuesday following the release of some encouraging economic data. The Commerce Department said U.S. construction spending edged higher in July, breaking a string of losses due to disruptions caused by the pandemic. And the Institute for Supply Management said its latest manufacturing index increased last month, reflecting a faster pace of expansion by American factories.

Investors will be looking for more clues on the state of the economic recovery this week amid what is going to be a busy week for economic news, including the government’s monthly U.S. jobs report on Friday.

Tuesday’s gains for U.S. stocks followed a mixed finish in European and Asian markets.

Zoom Video Communications soared 39.5% a day after the now-ubiquitous video conferencing service reported another quarter of explosive growth. Tesla fell 4.1% after the electric car maker said it would sell up to $5 billion in stock.

Walmart led the gainers in the S&P 500 as investors welcomed news of the retail giant’s debut later this month of a of a service offering members same-day delivery, fuel discounts and other perks. The stock rose 6.1%.

Whether the market can sustain its upward trajectory in September, traditionally the worst month for stocks, will depend on how several potentially market-moving variables play out the next few months. Will Congress reach a deal on another economic stimulus bill? Will coronavirus infections surge as students in states where schools are due to reopen go back to the classroom? How will the elections shake out?

“It's a market that's at all-time highs, but not without risks,” Sandven said.

The yield on the 10-year Treasury fell to 0.68% from 0.71% late Monday.

Oil prices were headed higher. Benchmark U.S. crude oil was up 0.6% to $42.86 a barrel. Brent crude, the international standard, was up 0.8% at $45.66 a barrel.

In Europe, France’s CAC 40 fell 0.2%, while Germany’s DAX added 0.1%. Britain’s FTSE 100 lost 1.7% a day after it was closed for a public holiday.

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