Nasdaq leads Wall Street's gains as Microsoft hits record high

It was a straight shot up all day on all three indexes, the Dow and Nasdaq once again with triple-digit gains, the Dow up 203. Having recruited two of the top AI execs from one of the top AI companies, Microsoft shot way up to a record high and took the whole tech sector with them. The combo of falling Treasury yields, a strong earnings season and the expected traditional holiday rally has set a positive mood. The Dow is at its highest since August 9 and the S&P is just 1% short of its 2023 high in July. This week’s catalysts include Nvidia’s Q3, Tuesday’s Fed minutes, and Black Friday foot traffic. Volume was below average at 10.1 billion. 

Nasdaq leads Wall Street's gains as Microsoft hits record high

By Sinéad Carew and Amruta Khandekar

Mon November 20, 2023 4:01 PM

DJ: 34,947.28  +1.81         NAS: 14,125.48  +11.81        S&P: 4,514.02  5.78         11/17 

DJ: 35,151.04  +203.76     NAS: 14,284.53  +159.05      S&P: 4,547.38  +33.36     11/20

Nov 20 (Reuters) - Wall Street's three major U.S. stock averages closed higher on Monday with Nasdaq leading gains as heavyweight Microsoft rallied after it hired prominent artificial intelligence executives, while lower Treasury yields also provided support.  The S&P 500 information technology sub-index (.SPLRCT) was the top gainer among the S&P 500's 11 major sectors, getting its biggest boost from Microsoft (MSFT.O) shares which touched a record high.  Microsoft CEO Satya Nadella said Sam Altman, who headed OpenAI until he was ousted late last week, was set to join Microsoft to lead a new advanced AI research team. Microsoft will also take on Greg Brockman, another OpenAI cofounder, as well as other researchers.

The news set a positive tone for the technology sector, which was also lifted heavyweight stocks including Apple (AAPL.O) and Nvidia (NVDA.O).  Investors have been cheering a better-than-expected earnings season and the ongoing trend of falling Treasury yields, said Bruce Zaro, managing director at Granite Wealth Management in Providence, Rhode Island.  "The market likes what it sees in the behaving bond market. It likes what it sees in earnings reports and it's in the holiday mood," said Zaro, noting that investors may be preparing for a rally which often comes with the year-end holiday season. 

The Dow Jones Industrial Average (.DJI) rose 203.76 points, or 0.58%, to 35,151.04, the S&P 500 (.SPX) gained 33.36 points, or 0.74%, at 4,547.38 and the Nasdaq Composite (.IXIC) added 159.05 points, or 1.13%, at 14,284.53.  The Dow posted its highest closing level since Aug. 9. The benchmark S&P 500 (.SPX) ended less than 1% below its 2023 closing peak reached in late July.

Wall Street's main indexes have staged a rebound so far in November, after about three months of weakness as evidence of easing U.S. inflation supported bets that the Federal Reserve was done raising interest rates. The benchmark S&P 500 (.SPX) was also closing back in on its year-to-date high reached in July, just a little over 1% below the milestone.  Traders have nearly fully priced in the likelihood that the Fed will keep interest rates unchanged in December, and have started pricing in rate cuts as soon as March, according to the CME Group's FedWatch tool. 

While trading volume is often thin ahead of Thursday's U.S. Thanksgiving holiday, investors will have at least two potential catalysts to monitor.

One is the quarterly report, due out on Tuesday from chip designer Nvidia (NVDA.O), whose stock is seen as one of the best ways to bet on the emerging artificial intelligence industry. Nvidia's results will wrap up the earnings season for the so-called "Magnificent Seven" group of megacap companies.  Also on Tuesday, the Fed is expected to issue minutes of its November meeting, which may provide clues on the direction of U.S. interest rates.  Capping off the week, foot traffic at stores on Black Friday could provide a gauge on the state of U.S. consumer spending. 

Among individual movers, Bristol Myers Squibb (BMY.N) fell as Germany's Bayer (BAYGn.DE) on Sunday stopped a late-stage trial testing a new anti-clotting drug, hurting investor confidence in all firms developing similar class of drugs.  Boeing (BA.N) rose after Deutsche Bank upgraded the aerospace company to "buy" from "hold" and raised its price target to $270 from $204. 

Advancing issues outnumbered decliners on the NYSE by a 2.17-to-1 ratio; on Nasdaq, a 1.66-to-1 ratio favored advancers.  The S&P 500 posted 29 new 52-week highs and one new low; the Nasdaq Composite recorded 78 new highs and 90 new lows.

On U.S. exchanges 10.1 billion shares changed hands compared with the 11.0 billion moving average for the last 20 sessions.