By Geoffrey Smith
Investing.com — U.S. stock markets opened marginally higher on Monday against a backdrop of unease over high energy prices that appear ever more likely to feed through into higher inflation and tighter monetary policy from the Federal Reserve.
Trading volumes were moderate, however, depressed by the Columbus Day holiday, as well as by the awareness that the third-quarter earnings season is about to start.
By 9:45 AM ET (1345 GMT), the Dow Jones Industrial Average was up 58 points, or 0.2%, at 34,804 points. The S&P 500 was also up 0.2% while the Nasdaq Composite was up 0.3%.
JPMorgan is due to kick off earnings season on Wednesday, with analysts expecting it to grind out a rise of less than 3% in earnings per share, compared to the third quarter of 2020. But bank stocks have fared better than most, recently, as the rise in bond yields has brightened the outlook for their core lending businesses. The benchmark 10-year Treasury yield had its highest close in over three months on Friday at 1.61%. JPMorgan (NYSE:JPM) stock inched up 0.3% in early trading, while Bank of America (NYSE:BAC) stock gained another 0.9% and Citigroup (NYSE:C) stock rose 1.5%.
Energy names dominated the list of early gainers once again, after crude oil prices surged to a fresh seven-year high overnight. Exxon Mobil Corp (NYSE:XOM) stock rose 0.7% while Occidental Petroleum (NYSE:OXY) stock rose 2.2%.
But the biggest gainers were Chinese companies’ American Depositary Receipts, after signs that Beijing may be relenting in its pressure on tech companies after a barrage of criticism during the summer that was widely interpreted as an attack on the extreme wealth accumulated by the sector’s biggest names. Meituan ADRs rose 4.5% after the company received a relatively light fine of $534 million from antitrust regulators for various abuses of its dominant market position. It’s now recouped almost all the losses it’s suffered since July.
Other Chinese ADRs – notably those already in the authorities’ cross-hairs – also fared well on hopes that those companies too will be able to avoid the worst-case scenario. Alibaba (NYSE:BABA) ADRs, which had fallen more than 50% from their 2020 peak during the summer, rose 3.4%, while Pinduoduo (NASDAQ:PDD) rose 1%.
Among the losers were Southwest Airlines (NYSE:LUV) stock, falling 2.4% after a weekend in which bad weather scuppered its ambitious plans for cashing in on the Columbus Day weekend. Weather problems in Florida led to a cascade of problems that left aircraft and personnel in the wrong parts of the country, forcing the airline to cancel over 1,000 flights.
Hasbro Inc (NASDAQ:HAS) stock lost 0.7% after it lost its CEO to medical leave just as the key holiday season approaches, while Emerson Electric (NYSE:EMR) stock fell 1.6% after it agreed to spin off its industrial software businesses into a venture with Aspen Technology (NASDAQ:AZPN), which rose 8.7%.