American stock indices experienced a notable upswing on Monday, rebounding from the fallout of falling gold and silver prices that had prompted traders to offload assets to cover losses in precious metals. The market shifted its focus to economic data and corporate news, resulting in positive momentum across multiple sectors.
The Institute for Supply Management (ISM) reported that the U.S. Manufacturing Purchasing Managers' Index (PMI) rose to 52.6 in January, a significant increase from 47.9 in December. This marks the highest level since August 2022 and surpasses analysts' expectations of a modest rise to 48.5. A PMI reading above 50 indicates an expansion in business activity, whereas a reading below 50 suggests contraction. The index had remained below the critical 50-mark for ten consecutive months prior to January.
Tech stocks showed remarkable gains during the trading session, with Sandisk surging by 15.4%, followed by Western Digital at 8% and Seagate Technology at 6.2%. Other major players included Micron Technology (+5.5%), Apple Inc. (+4.1%), Advanced Micro Devices (+4%), Cisco Systems Inc. (+3%), International Business Machines (+2.6%), Alphabet Inc. (+1.7%), and Amazon.com Inc. (+1.5%).
Cruise operators Carnival and Norwegian Cruise Line saw their stocks rise by 8.1% and 7.7%, respectively, while casino operator Las Vegas Sands gained 5.5%. Walmart Inc.'s market value increased by 4.1%, and Visa Inc. rose by 3.7%. Tyson Foods saw a 0.6% bump following its quarterly report, which exceeded market expectations for both adjusted earnings and revenue.
However, not all stocks fared well. Walt Disney Co., despite reporting strong quarterly results, saw its shares decline by 7.4%. Nvidia Corp. shares fell by 2.9% after CEO Jensen Huang dismissed rumors of dissatisfaction with a previously announced $100 billion investment agreement with OpenAI. Tesla's stock dropped by 2%, Microsoft Corp. fell by 1.6%, and Meta saw a decrease of 1.4%.
Energy companies Devon and Coterra experienced declines of 0.2% and 3.6%, respectively, following news of a merger agreement. Meanwhile, market capitalization for software developer Strategy fell by 6.7% amid a drop in Bitcoin prices, as the company holds significant reserves of the cryptocurrency. Exxon Mobil and Chevron Corp. also saw declines of 2.1% and 1.6% respectively, following a decrease in oil prices.
Conversely, falling fuel prices benefitted airline stocks, with JetBlue rising by 8.2%, United Airlines by 4.9%, Delta Air Lines by 4.8%, and Southwest Airlines by 4.5%.
By the end of the trading day, the Dow Jones Industrial Average had climbed by 1.05%, closing at 49,407.66 points. The Standard & Poor's 500 index rose by 0.54% to 6,976.44 points, while the Nasdaq Composite increased by 0.56%, finishing at 23,592.11 points.
This robust performance indicates a potential recovery in investor confidence and may set a competitive tone for companies in various sectors as they adjust to the shifting economic landscape.
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