Wall Street extends recent gains, led by megacaps

© 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 were higher in afternoon trading on Monday, adding to recent strong gains, with megacap growth shares rising as U.S. Treasury yields eased.

Shares of Apple Inc (NASDAQ:AAPL), up 0.5%, and Microsoft Corp (NASDAQ:MSFT), also up 0.5%, were among the biggest boosts to the S&P 500 and Nasdaq.

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.

Some investors also have been growing more convinced that the economy may avoid a severe downturn even as it copes with high inflation.

"We're back to growth doing well relative to value, and market participants looking at the (Federal Reserve) 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.

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

The Dow Jones Industrial Average rose 152.89 points, or 0.45%, to 33,913.94, the S&P 500 gained 15.65 points, or 0.37%, to 4,295.8 and the Nasdaq Composite added 65.58 points, or 0.5%, to 13,112.76.

The S&P value index was up 0.3% while the growth index was up 0.5%.

Quarterly reports from big retailers are expected this week and will round out the second-quarter reporting period. Results from Walmart (NYSE:WMT) Inc are due on Tuesday. Walmart's stock was up 0.3%.

U.S.-listed shares of China's e-commerce giant Alibaba (NYSE:BABA) Group Holding Ltd slipped 0.9%.

Advancing issues outnumbered declining ones on the NYSE by a 1.03-to-1 ratio; on Nasdaq, a 1.20-to-1 ratio favored advancers.

The S&P 500 posted 7 new 52-week highs and 29 new lows; the Nasdaq Composite recorded 67 new highs and 25 new lows.