S&P 500 and Nasdaq 100 Close at Record Highs on Strength in Technology Stocks

The S&P 500 Index ($SPX) on Monday closed up +0.25%, the Dow Jones Industrials Index ($DOWI) closed up +0.36%, and the Nasdaq 100 Index ($IUXX) closed up +0.35%.

U.S. stock indexes on Monday settled with moderate gains, with the S&P 500 and Nasdaq 100 posting new all-time high and the Dow Jones Industrials posting a 2-month high. Strength in technology stocks on Monday lifted the overall market.  Also, dovish central bank comments on Monday signal continued support for stimulus measures that are bullish for stocks.   In addition, stocks rose Monday on optimism about Q2 company earnings results, which will begin rolling in this week.

Dovish central bank comments on Monday were supportive of stocks. New York Fed President Williams said, "clearly, right now, we have not achieved substantial further progress" on employment and inflation to begin tapering asset purchases.  Also, Richmond Fed President Barkin said inflation could cool more than expected and that the U.S. labor market "hasn't healed enough" for the Fed to taper bond buying.  In addition, ECB President Lagarde said the July 22 ECB meeting will have "some interesting variations and changes" and that the ECB's emergency stimulus that will end in March 2022 could "transition into a new format."

The spread of the delta Covid variant worldwide has forced renewed lockdowns across parts of Asia and Australia and has sparked concern about a slowdown in global growth.  Also, the infection rate in the U.S. has increased after the 7-day average of new U.S. Covid infections rose to a 1-1/2 month high Sunday of 19,479. 

Strength in technology stocks on Monday was supportive of the overall market.  Notable gainers include Tesla (TSLA), which closed up more than +4%.  Lam Research (LRCX) and NXP Semiconductors (NXPI) closed up more than +2%, and Alphabet (GOOG), Broadcom (AVGO), and Applied Materials (AMAT) all closed up more than +1%. 

Disney (DIS) closed up more than +4% Monday after the company raised the price of its ESPN+ sports streaming service by +17%, effective August 13. 

State Auto Financial (STFC) closed up more than +190% Monday after Liberty Mutual said it plans to buy the company for $2.29 billion. 

L Brands (LB) closed up more than +4% Monday after JPMorgan Chase kept an overweight rating on the company and raised its price target on the stock to $100 a share from $93. 

Virgin Galactic (SPCE) tumbled more than -17% Monday after the company said today that it might offer up to $500 million in stock.

Travel stocks were weaker Monday on concern the spread of the delta Covid variant could delay the reopening of the global economy.  Carnival (CCL), Norwegian Cruise Line Holding (NCLH), and Royal Caribbean (RCL) are closed down more than -1% Monday. Also,  American Airlines Group (AAL) and United Airlines Holdings (UAL) closed lower.

The VIX S&P 500 Volatility Index ($VIX) on Monday closed down -0.01 at 16.17, well below last Thursday’s 2-week high of 21.29 and modestly above the 16-month low of 14.10 from June 29.