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U.S. Stocks Seeing Modest Strength Ahead Of Fed Meeting

Stocks are seeing modest strength during trading on Monday, adding to the substantial gains posted last week. The major averages have all moved to the upside on the day, although buying interest has been somewhat subdued.

Currently, the Dow is up 75.63 points or 0.2 percent at 38,315.29, the Nasdaq is up 42.80 points or 0.3 percent at 15,970.70 and the S&P 500 is up 12.53 points or 0.3 percent at 5,112.49.

The modest strength on Wall Street comes as stocks continue to benefit from the upward momentum seen last week, which came amid a positive reaction to upbeat tech earnings.

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Shares of Tesla (TSLA) have skyrocketed by 12.3 percent after the electric vehicle maker said local Chinese authorities removed restrictions on its cars,

Overall trading activity is somewhat subdued, however, as traders look ahead to the Federal Reserve’s monetary policy announcement on Wednesday.

The Fed is widely expected to leave interest rates unchanged, but the accompanying statement and Fed Chair Jerome Powell’s post-meeting press conference may shed additional light on the outlook for rates.

Recent economic data has tamped down expectations of a near-term rate cut, with the central bank now seen as likely to leave rates unchanged until at least September.

Traders may also be sticking to the sidelines ahead of the release of an avalanche of earnings news this week along with the Labor Department’s closely watched monthly jobs report.

Sector News

Telecom stocks have shown a significant move to the upside on the day, driving the NYSE Arca North American Telecom Index up by 1.6 percent.

Considerable strength is also visible among biotechnology stocks, as reflected by the 1.4 percent gain being posted by the NYSE Arca Biotechnology Index.

Utilities, networking and tobacco stocks are also seeing notable strength, while most of the other major sectors are showing more modest moves.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Monday, with the Japanese markets closed for a holiday. China’s Shanghai Composite Index climbed by 0.8 percent, while Hong Kong’s Hang Seng Index rose by 0.5 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the U.K.’s FTSE 100 Index is up by 0.2 percent, the German DAX Index is down by 0.1 percent and the French CAC 40 Index is down by 0.2 percent.

In the bond market, treasuries are extending the rebound seen last Friday. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 4.1 basis points at 4.628 percent.

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