Wall Street ends up, extends recent gains as growth shares rise

© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 22, 2022. REUTERS/Brendan McDermid/File Photo

By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. stocks ended higher on Monday, adding to recent strong gains, with megacap growth shares rising as U.S. Treasury yields eased.

Shares of Apple Inc (NASDAQ:AAPL) and Microsoft Corp (NASDAQ:MSFT) were among the biggest boosts to the S&P 500 and Nasdaq.

Benchmark Treasury yields were slightly lower, while China's central bank cut key lending rates in a surprise move to revive demand after the economy unexpectedly slowed in July.

Stocks extended gains from last week when signs that inflation may have peaked in July increased investor confidence that a bull market could be under way. The S&P 500 has rebounded sharply since mid-June, but remains down for the year.

U.S. data in recent weeks also has bolstered hopes that the Federal Reserve can achieve a soft landing for the economy.

"We're back to growth doing well relative to value, and market participants looking at the Fed and saying, 'Hey, they're going to be cutting rates here sooner than we know, and that's going to be good for the equity market,'" said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago.

According to preliminary data, the S&P 500 gained 15.94 points, or 0.37%, to end at 4,296.09 points, while the Nasdaq Composite gained 76.71 points, or 0.59%, to 13,123.89. The Dow Jones Industrial Average rose 142.52 points, or 0.42%, to 33,903.57.

Higher interest rates can depress stock multiples, especially of technology and other growth stocks.

The S&P 500 value index underperformed the S&P 500 growth index on the day.

Quarterly reports from big retailers are expected this week and will round out the second-quarter reporting period. Results from Walmart (NYSE:WMT) Inc and Home Depot Inc (NYSE:HD) are due before the bell on Tuesday.

Target Corp (NYSE:TGT) is also due to report quarterly results this week.

Estimated earnings growth on the second quarter for S&P 500 companies has improved since July 1, and news from U.S. companies has mostly surprised investors, who had been bracing for a gloomier outlook on both businesses and the economy.

U.S.-listed shares of China's e-commerce giant Alibaba (NYSE:BABA) Group Holding Ltd slipped.