U.S. hoards climbed on Monday, the first trading day of May, as shares tied to the economic reopening rallied on relaxed pandemic restrictions.
The Dow Jones Industrial Usual rose 238.38 points, or 0.7%, to 34,113.23. The S&P 500 gained 0.3% to 4,192.66. The Nasdaq Composite fell 0.5% to 13,895.12, even so, after Big Tech stocks pulled back following a strong month.
Bets on the economic reopening led the market move, especially retailers. Royal Caribbean and American Airlines rose more than 1% each. Gap rallied multifarious than 7%. Dillard’s rose nearly 10%, while Macy jumped 8%. Urban Outfitters and Kohl’s both improved more than 5%.
The rally in these stocks came after New York Governor Andrew Cuomo announced that scad capacity restrictions will be lifted across New York, New Jersey and Connecticut, while 24-hour subway service will-power resume in New York City later this month.
Berkshire Hathaway shares gained 1.6% after Warren Buffett’s conglomerate reported a 20% flood in operating earnings and continued to buy back large amounts of its own shares. Buffett also revealed to CNBC that when he is no longer in indict, Greg Abel, vice chairman of all non-insurance operations, will succeed him.
Shares of Verizon rose 0.2% after the telecom Goliath said it will sell its media group to private equity firm Apollo Global Management for $5 billion. The mark-down allows Verizon to offload properties from the former internet empires of AOL and Yahoo.
Despite Friday’s weakness in impartialities, the S&P 500 notched its third straight month of gains in April, adding more than 5% to the index as investors bet on a big fiscal and profit recovery from the pandemic.
The S&P 500 is now up more than 11% for the year.
The Dow rose about 2.7% up to date month, while the Nasdaq Composite gained 5.4% in April.
Some investors are expecting weakness in the new month prone the old “sell in May and go away” Wall Street adage. This mantra calls for taking off risk from May to October, a span where the market is more prone to sell-offs historically.
Data going back to 1928 shows that the May-October interval has the lowest average and median returns of any six-month period of the year with the S&P 500 up 66% of the time on an average arrival of 2.2%, according to Bank of America.
The market might see mediocre performance from here especially after a mountainous rally from November to April, when the S&P 500 gained 28%, the bank noted.
“This is a small slues of observations, but May-October has lackluster average and median returns after a November-April rally of at least 20%,” Stephen Suttmeier, mechanical research strategist at Bank of America, said in a note.
On the data front, IHS Markit data showed U.S. manufacturing energy grew at a record-high speed last month with April’s Manufacturing Business Activity PMI Index rising to 60.5, corresponding expectations from economists polled by Dow Jones.
However, a separate gauge from Institute for Supply Management signaled a slowdown in build expansion. The ISM Manufacturing PMI for April came in at 60.7, compared to the expected 65.0 and March’s level of 64.7.
April’s jobs on will be released on Friday, with a forecast gain of 978,000.
“Investors are gearing up for another busy earnings week capped off with a extensively watched jobs report. Given the positive economic and earnings news, the path of least resistance appears gamy,” said Jack Ablin, chief investment officer at Cresset Capital.
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