Biotech names lift the NasdaqComment on this story
New York - US stocks rose on Monday, with a rally in high-growth names among Internet and biotech shares giving the Nasdaq a gain of almost 1 percent.
Equities have been pressured recently, with the S&P 500 coming off its first two-week decline since January as investors have become concerned about the economy's growth prospects.
“The listlessness in the market shows the struggle investors are having right now: Valuations are full but not stretched, and there's a lack of decisive evidence that the economy will kick into higher growth and justify these valuations,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
High-growth “momentum” stocks were among the strongest of the day, with TripAdvisor Inc up 5.2 percent at $86.41 and Netflix Inc up 4.2 percent at $364.50. Vertex Pharma gained 3.4 percent to $67.22.
Internet and biotech names have been among the most volatile in recent weeks, advancing on signs of economic improvement and slumping on concerns that their valuations are too hefty. The small-cap Russell 2000 index rose 1 percent after three straight declines that took it several times near correction territory, a drop of 10 percent from a recent high.
The Dow Jones industrial average advanced 20.55 points, or 0.12 percent, to end at 16,511.86. The Standard & Poor's 500 Index gained 7.22 points, or 0.38 percent, to finish at 1,885.08. The Nasdaq Composite Index shot up 35.23 points, or 0.86 percent, to close at 4,125.82.
The Dow's gain was limited as AT&T fell 1 percent to $36.38 a day after the US phone company agreed to buy DirecTV, the No. 1 US satellite TV provider, for $48.5 billion. DirecTV shares fell 1.8 percent to $84.65.
US-listed shares of AstraZeneca sank 12 percent to $70.64 after the British drugmaker rejected a “final” merger offer from Pfizer. Shares of Pfizer rose 0.6 percent to $29.28.
Campbell Soup fell 2.4 percent to $44.06 and was one of the S&P 500's worst performers after the world's largest soup maker posted weaker-than-expected quarterly sales and cut its full-year sales forecast.
After the market closed, Urban Outfitters fell 4.3 percent to $34.60 after the teen apparel retailer reported its first-quarter results.
Early in the session, a drop in the yield of the 10-year US Treasury note to near 2.5 percent gave investors another reason to buy equities and helped support the stock market. By late in the day, though, longer-term bond yields rose as investors sold some Treasuries to take profits from the recent rally. The 10-year note's yield was 2.55 percent late on Monday, while its price fell 8/32.
About 62 percent of stocks traded on the New York Stock Exchange closed higher, while two-thirds of Nasdaq-listed shares ended higher.
About 4.94 billion shares traded on all US platforms, according to BATS exchange data, below the month-to-date average of 6.05 billion. - Reuters