Stocks gained on Monday, looking to kick off August trading on a high note after a winning July.
The S&P 500 added about 0.5% shortly after market open and neared an all-time high. The Dow and Nasdaq also rose.
Equity investors are entering August with momentum from a sixth straight monthly gain, with the S&P 500 logging an advance of 2.3% in July. Both the Dow and Nasdaq also added more than 1% for the month.
These increases came alongside a strong season so far for quarterly corporate earnings results, with companies across industries revealing much better-than-expected second-quarter revenues and profits as the economy began to reopen in earnest this spring.
Companies including Etsy (ETSY), Uber (UBER) and Lyft (LYFT) are set to report earnings results this week.
So far, 59% of S&P 500 companies have reported second-quarter earnings results, and 88% of these companies have beaten Wall Street’s earnings per share estimates, according to FactSet data.
The expected earnings growth rate for S&P 500 companies is tracking toward 85.1%, which would be the biggest jump since the fourth quarter of 2009.
Overall, the broad strength among corporate earnings results has helped investors shake off other concerns still lingering in the recovering economy, including over the Delta variant spreading rapidly across the U.S. Some strategists suggested this latest virus fear, however, might begin to wane.
Signals that the Federal Reserve officials were inclined to leave their highly accommodative monetary policies in place at least somewhat longer have also helped underpin stocks.
At last week’s Fed meeting, the central bank suggested it was making further progress on its discussion around tapering its massive crisis-era asset purchase program, but that the economy still had further to recover before the Fed was ready to announce the plan.
Both the pace and structure of this tapering also remain in discussion among Federal Open Market Committee, Fed Chair Jerome Powell said during last week’s press conference.
Meanwhile, IHS Markit’s manufacturing purchasing managers’ index reached the highest level on record for July.
A closely watched index tracking U.S. manufacturing sector activity reached the highest level on record in July, according to IHS Markit’s monthly survey.
The institution’s manufacturing purchasing managers’ index (PMI) rose to 63.4 in July, up from 61.2 in June. This exceeded the “flash” July PMI released last month, and reached the highest level on record, based on data extending back 14 years.