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Dow and S&P 500 close at records as tech stocks surge

CNBC logo CNBC 2 days ago Fred Imbert

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U.S. stocks traded higher on Monday as technology stocks recovered from a wobbly performance last week.

The Dow Jones industrial average rose 125 points and hit a record, surpassing a previous all-time high of 21,391.97, which was set last week.

The S&P 500 gained 0.7 percent to also reach a record, with information technology rising 1.4 percent to lead advancers. The Nasdaq composite outperformed, rising 1.3 percent.

"Tech stocks, after being on everyone's sell list over the past few days, are now back on people's buy lists," said Anthony Conroy, president at Abel Noser. "Looks like there's some buying on the dip."

Large-cap technology stocks like Facebook, Amazon, Apple, Netflix and Google-parent Alphabet all traded higher. Amazon also hit an all-time high at the open.

Last week, valuation concerns sent the overall sector lower by around 0.8 percent. Tech is by far the best-performing sector of the year, rising 17.2 percent in the period.

"I don't know where the optimism is coming from. That's not to say we should be negative. I just don't see any reason for excessive optimism or pessimism right now," said Randy Frederick, vice president of trading and derivatives at Charles Schwab.

Several tech CEOs, including Amazon's Jeff Bezos and Apple's Tim Cook were slated to meet with President Donald Trump as the administration sets its sights on dramatic spending cuts.

Overseas, European stocks rose broadly after French President Emmanuel Macron's party won a parliamentary majority. The pan-European Stoxx 600 index rose 0.86 percent, while the French CAC 40 advanced nearly 1 percent.

"I think there's a bit of a sense of relief that Macron won the majority," said Jeremy Klein, chief market strategist at FBN Securities. "Europe had been treading water recently and now it looks like it's reverting higher."

There are no major economic data due Monday, but Wall Street paid attention to remarks from a key Federal Reserve official.

Before the bell, New York Fed President Bill Dudley said the central bank inflation should pick up as wages rise along with continuing improvement in the labor market.

Treasury yields erased earlier losses following Dudley's statement, with the benchmark 10-year yield climbing to 2.19 percent.

Dudley made his remarks less than a week after the Fed raised rates for the second time this year. Investors, however, are skeptical the central bank will be able to further tighten in September. Market expectations for a September rate hike are just 13 percent, according to the CME Group's FedWatch tool.

"The market seems to be ignoring the Fed and it's doing its own thing instead," said Peter Cardillo, chief market economist at First Standard Financial.

Monday

7:00 p.m. Chicago Fed President Charles Evans

Tuesday

Earnings: Lennar, Adobe, FedEx

8:30 a.m. Current account

8:30 a.m. Philadelphia Fed

3:00 p.m. Dallas Fed President Robert Kaplan

Wednesday

Earnings: Oracle, Winnebago, CarMax

10:00 a.m. Existing home sales

Thursday

Earnings: Bed, Bath and Beyond, Barnes and Noble, Sonic, Accenture

8:30 a.m. Initial claims

9:00 a.m. FHFA home prices

10:00 a.m. Fed Gov. Jay Powell at Senate Banking

Friday

Earnings: Blackberry, Finish Line

9:45 a.m. Manufacturing PMI

10:00 a.m. New home sales

10:15 a.m. St. Louis Fed President James Bullard

12:40 p.m. Cleveland Fed President Loretta Mester

2:15 p.m. Fed Gov. Powell

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