Tech Stocks Help Lead Continued Rebound On Wall Street

(RTTNews) - Stocks moved sharply higher over the course of the trading day on Monday, extending the rally seen in the previous session. Tech stocks helped lead the continued advance on Wall Street, resulting in a particularly strong gain by the tech-heavy Nasdaq.

The major averages all posted notable gains, although the Nasdaq still outperformed its counterparts. While the Nasdaq soared 469.31 points or 3.4 percent to 14,239.88, the Dow jumped 406.39 points or 1.2 percent to 35,131.86 and the S&P 500 surged 83.70 points or 1.9 percent to 4,515.55.

Despite the strong upward move seen over the last two sessions of January, the major averages posted steep losses for the first month of the year. The Nasdaq and the S&P 500 plunged by 8.9 percent and 5.2 percent, respectively, recording their worst months since March of 2020.

The strength on Wall Street came as traders continued to pick up tech stocks at reduced levels, with the Nasdaq bouncing further off the eight-month closing low set last Thursday.

Positive analyst comments contributed to the strength in the tech sector, with Netflix (NFLX), Tesla (TSLA) and Spotify (SPOT) all posting strong gains following upgrades.

Netflix and Spotify were both upgraded to Buy from Neutral by Citi, while Credit Suisse raised its rating on Tesla's stock to Outperform from Neutral.

Meanwhile, traders were also looking ahead to the Labor Department's closely watched monthly jobs report on Friday.

Economists currently expect employment to increase by 155,000 jobs in January after rising by 199,000 jobs in December. The unemployment rate is expected to hold at 3.9 percent.

The strength of the monthly jobs data could impact expectations regarding how fast the Federal Reserve will raise rates from near-zero levels in an effort to fight inflation.

Reports on manufacturing and service sector may also attract attention in the coming days along with preliminary data on labor productivity and costs in the fourth quarter.

Sector News

Semiconductor stocks helped to lead the rally by the tech sector, driving the Philadelphia Semiconductor Index up by 5.4 percent.

The index continued to regain ground after hitting its lowest intraday level in over six months before rebounding last Friday.

The strength in the tech sector also reflected significant advances by networking, biotechnology and computer hardware stocks.

Substantial strength was also visible among airline stocks, with the NYSE Arca Airline Index soaring by 5.2 percent on the day.

Retail, gold and brokerage stocks also saw notable strength, while oil service stocks bucked the uptrend despite a sharp increase by the price of crude oil.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Monday, with the Chinese and South Korean markets closed for the Lunar New Year holiday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both jumped by 1.1 percent.

Most European stocks also moved to the upside on the day. While the U.K.'s FTSE 100 Index closed marginally lower, the French CAC 40 Index rose by 0.5 percent and the German DAX Index shot up by 1 percent.

In the bond market, treasuries bounced back near the unchanged line after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, ended the day flat at 1.782 percent after reaching a high of 1.816 percent.

Looking Ahead

Trading on Tuesday may be impacted by reaction to reports on manufacturing activity, construction spending and job openings.

On the earnings front, Exxon Mobil (XOM), PulteGroup (PHM) and UPS (UPS) are among the companies due to report their quarterly results before the start of trading on Tuesday.