S&P 500 and Nasdaq Set Records as New Wall Street Week Begins

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Stocks were mostly higher Monday but a worrying rise of the highly contagious Delta strain of the coronavirus in Asia and Europe has investors taking a defensive posture as Wall Street begins a new week.

The Dow Jones Industrial Average fell 42 points, or 0.12%, to 34,291, the S&P 500 gained 0.16% and the Nasdaq was up 0.59%.

The S&P 500 and Nasdaq set intraday record highs on Monday.

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A jump in Delta variant coronavirus infections in Asia has forced Sydney to issue fresh stay-at-home orders and lockdowns have been extended in Malaysia and Thailand, underscoring the breadth of the new outbreak in the region. 

Stocks in Asia finished lower Monday as the new restrictions were put in place.

The S&P 500 closed at a record in mixed trading Friday amid optimism about the U.S. economic recovery. The index’s performance last week was its best weekly performance since February.

Fears over the Federal Reserve’s hawkish tilt have eased, with sentiment getting a boost from a report on inflation that came in as expected. The personal consumption expenditures price gauge – the Federal Reserve’s preferred inflation measure – rose 0.4% in May, below forecasts.

The data calmed market worries about a rapid rise in prices as the U.S. economy makes its way out of the COVID-19 pandemic.

Investors last week also were encouraged by the announcement of a roughly $1 billion bipartisan infrastructure deal.

“With inflation fears quelled for the moment and banks getting a clean bill of health late last week, the market looks to be in a good place,” said Chris Larkin, managing director of trading at E*Trade.

“And while a lot can happen in three days, if the month had ended on Friday the stock market would have booked one of its 20-best Junes of the past 60 years – no June swoon here,” Larkin added.

Boeing  (BA) – Get Report was falling Monday as its fuel-efficient 777X long-haul airliner may not receive federal approval until some time in 2023, according to a letter recently made public by the Federal Aviation Administration.

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Tesla  (TSLA) – Get Report will recall about 285,000 of its Model 3 and Model Y electric cars that were built in China because of a software glitch.

The stock, which jumped 7.8% last week for its best weekly performance in months was up 1.1% on Monday.