U.S. Stocks Move Mostly Higher As Recession Fears Ease

Stocks have moved mostly higher in morning trading on Monday, with the major averages all moving to the upside after closing mixed for two straight sessions. The Dow has reached a two-month intraday high, while the Nasdaq and the S&P 500 have reached their best levels in three months.

Currently, the major averages are off their highs of the session but still firmly positive. The Dow is up 262.26 points or 0.8 percent at 33,065.73, the Nasdaq is up 142.44 points or 1.1 percent at 12,780.00 and the S&P 500 is up 32.49 points or 0.8 percent at 4,177.68.

The strength on Wall Street extends a recent upward trend on Wall Street, as the major averages continue to recover from their June lows.

Easing concerns about a potential recession may be contributing to the continued buying interest following last week’s much stronger than expected jobs data.

The report showed non-farm payroll employment spiked by 528,000 jobs in July after surging by an upwardly revised 398,000 jobs in June.

Economists had expected employment to climb by about 250,000 jobs compared to the addition of 372,000 jobs originally reported for the previous month.

The Labor Department also said the unemployment rate unexpectedly edged down to 3.5 percent July from 3.6 percent in June. The unemployment rate was expected to remain unchanged.

With the unexpected decrease, the unemployment rate fell to its lowest level since hitting a matching rate in February of 2020, just before Covid-19 lockdowns began to take effect in the U.S.

Traders seem to have shrugged off concerns the strong data has increased the likelihood of another 75 basis point interest rate hike by the Federal Reserve next month.

Meanwhile, closely watched U.S. inflation data is likely to attract attention in the coming days, as economists have suggested that the inflation data could have an even greater impact on Fed officials’ thinking than the jobs data.

Gold stocks have shown a substantial move to the upside in morning trading, driving he NYSE Arca Gold Bugs Index up by 2.7 percent.

The rally by gold stocks comes amid an increase by the price of the precious metal, with gold for December delivery rising $14.70 to $1,805.90 an ounce.

Significant strength is also visible among airline stocks, as reflected by the 2.7 percent jump by the NYSE Arca Airline Index. The index has reached its best intraday level in almost two months.

Housing, telecom and retail stocks are also seeing considerable strength on the day, moving higher along with most of the other major sectors.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan’s Nikkei 225 Index rose by 0.3 percent, while Hong Kong’s Hang Seng Index slid by 0.8 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.’s FTSE 100 Index has advanced by 0.9 percent, the French CAC 40 Index and the German DAX Index have both jumped by 1.1 percent.

In the bond market, treasuries are regaining ground after moving sharply lower last Friday. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 6.3 basis points at 2.777 percent.

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