S&P 500 stalls at record level, set for best August in 36 years By Reuters

© Reuters. The front facade of the of the NYSE is seen in New York

By Medha Singh and Devik Jain

(Reuters) – The S&P 500 hovered near record highs on Monday as bets on an economic revival due to prolonged central bank support put the index on course for its best August in decades.

The Federal Reserve’s commitment to tolerate inflation and keep interest rates low, positive developments in vaccines and treatments for COVID-19 and a momentum-driven rally in tech-focused stocks have helped the S&P 500 and Nasdaq hit consecutive all-time highs.

The Dow is within 3.5% of its record close on Feb. 12. Trading in new entrants to the blue-chip index Salesforce.com Inc (NYSE:), Honeywell International Inc (NYSE:) and Amgen Inc (NASDAQ:) was subdued.

Ousted companies Exxon Mobil Corp (NYSE:) slipped 1.6%, Pfizer Inc (NYSE:) dipped 0.3% and Raytheon Technologies (NYSE:) Corp was marginally higher.

“There is a reallocation of assets from sectors that are not performing, into sectors that are,” said Stan Gregor, chief executive officer of Summit Financial LLC in Parsippany, New Jersey.

“Right now the euphoria is stay long on technology and stay-at-home stocks.”

Technology stocks rose 0.3% on Monday and along with utilities were the only two major S&P sectors in positive territory.

The three main indexes are also set for their fifth straight monthly rise following March lows, with the S&P 500 looking at its biggest percentage rise in August since 1984, even as economic data pointed to an uneven recovery from the steep downturn.

China data showing a solid pace of expansion in the services sector this month lifted spirits at the start of the week. Focus will now be on the August U.S. jobs report slated for Friday.

U.S. presidential campaigns are set to take center-stage in the coming weeks with market volatility expected to spike ahead of polling in November.

At 09:53 a.m. ET, the was down 139.46 points, or 0.49%, at 28,514.41, the S&P 500 was down 3.65 points, or 0.10%, at 3,504.36. The was up 35.35 points, or 0.30%, at 11,730.98.

Among early movers, Aimmune Therapeutics (NASDAQ:) Inc’s shares more than doubled after Swiss food group Nestle SA (SIX:) offered to pay $2 billion for full ownership of the peanut allergy treatment maker.

Apple Inc (NASDAQ:) rose 2.6%, while Tesla (NASDAQ:) Inc gained 3.6%, as their stocks became less costly after their pre-announced stock splits took effect.

Suitors for TikTok’s U.S. assets, Microsoft Corp (NASDAQ:), Walmart (NYSE:) Inc and Oracle Corp (NYSE:), dropped between 0.6% and 2.4% as China’s new rules around tech exports meant a deal with ByteDance could need Beijing’s approval.

Declining issues outnumbered advancers for a 2.07-to-1 ratio on the NYSE and a 2.00-to-1 ratio on the Nasdaq.

The S&P index recorded 20 new 52-week highs and no new low, while the Nasdaq recorded 49 new highs and seven new lows.

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