Investing.com – The US stock market opened higher on Monday as strong tech stocks pushed the Nasdaq Composite to another all-time high, despite continuing signs that the US coronavirus epidemic is threatening to get completely out of control.
At 09:40 Eastern time (13:40 GMT), the NASDAQ Composite Index rose 1.2% to 10.745 points. The Dow Jones and S&P 500 indices rose 0.8%, with the Dow adding 208 points to 26, 279 points.
Tesla shares (NASDAQ: TSLA) were again in the spotlight: thanks to intensive purchases, they rose 11.3% to another new record on speculation that after another profitable quarter they will be included in the S&P 500 index. S&P 500 regularly is rebalancing, and Tesla is undoubtedly the largest in the United States, not yet part of it, but four profitable quarters is just one of many criteria the index owner insists on.
Over the past month alone, Tesla has risen 83%, mainly amid speculation that is increasingly taking place in the options market. However, Tesla has to make a big discount: it announced a 6% price cut for its new Model Y crossover over the weekend, just three months after the model debuted.
Shares in Maxim Integrated Products (NASDAQ: MXIM) rose 13.4% to a new record after news came out of a merger with the largest semiconductor manufacturer Analog Devices (NASDAQ: ADI), as part of a deal valuing the combined company at about $ 70 billion.
Shares of United Airlines (NASDAQ: UAL) fell 5.0%, while shares of American Airlines (NASDAQ: NASDAQ: AAL) fell 2.9% due to a series of negative news against the background of the epidemic. According to Johns Hopkins University, in the United States on Sunday more than 60 thousand new cases of the virus were registered for the third day in a row.
The market received support ahead of the upcoming season of earnings reports by Goldman Sachs (NYSE: GS), in which the investment bank raised the S&P 500 Index’s annual earnings estimate by a little less than 5%. However, he cautioned that forecasts would be more important than revenue reports until June.
The first major U.S. company to report, PepsiCo (NASDAQ: NASDAQ: PEP), posted a profit that was only slightly ahead of forecasts but defiantly refused to give a new financial forecast for the remainder of the year, citing the uncertainty surrounding the pandemic. This year, the company still promises to pay dividends in the amount of $ 7.5 billion to shareholders, of which $ 2 billion in the form of share buybacks, but did not indicate whether borrowing would be necessary and to what extent.
Futures for WTI crude oil fell 1.0% due to the prospect of OPEC and its allies to ease production restrictions. Shares of shale oil producer Parsley Energy (NYSE: PE) fell 3.5% after CEO Gallagher suggested that US oil production might not recover to what it was before the pandemic.