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US: Stocks gain again amid improved investor sentiment
[NEW YORK] Wall Street stocks pushed higher for a second session in a row Monday, a sign of improved investor sentiment despite the ongoing US government shutdown and other economic headwinds.
The Dow Jones Industrial Average ended 0.4 per cent higher at 23,531.35, as the broad-based S&P 500 gained 0.7 per cent to close at 2,549.69.
The tech-rich Nasdaq Composite Index jumped 1.3 per cent to finiish at 6,823.47, led by some industry giants, including Amazon, which finished Monday's session as the biggest company by market capitalization, overtaking Microsoft.
US stocks spent much of December in retreat amid worries over trade wars, higher Federal Reserve interest rates and slowing global growth.
But sentiment improved following dovish comments Friday from Federal Reserve Chair Jerome Powell.
"It seems as though investor sentiment or psychology just got too negative," said Jack Ablin of Cresset Wealth Advisors.
"Now the news has not been quite as bad as people feared. If we can continue the rally a little bit more, the earnings season should be actually very favorable news for investors."
Analysts expect companies in the S&P 500 to report earnings growth of 11.4 per cent for the fourth quarter, down from 25 per cent reported in the previous three quarters, according to Factset.
Some analysts said investors also were cheered by the resumption of US-China trade talks in Beijing involving mid-level officials.
US services sector activity cooled modestly in December, but remained well above historic levels, according to the Institute for Supply Management.
Among individual companies, Eli Lilly advanced 0.6 per cent after announcing it would acquire cancer treatment specialist Loxo Oncology in a cash deal valued at around US$8 billion. Loxo surged 66.3 per cent.
Tech shares performed well overall, with Netflix surging 6.0 per cent and Amazon 3.4 per cent. But some large tech names were flat or fell modestly, including Apple, Facebook and Google-parent Alphabet.