US stocks jump higher at open, recouping most of Friday's losses on earnings boost, M&A

10.00am: Strong start to August US stocks pushed higher at the open on Monday, starting the new week and the new month in a positive fashion and recouping all of Friday’s falls as investors cheered come strong earnings growth nd some M&A. The Dow Jones Industrial Average climbed 184 points, or 0.5% to 35,119, shortly after the opening bell, while the S&P 500 also added 0.5% and the Nasdaq Composite rose 0.3%. Investors are hopeful that economic expansion will boost corporate profits and enable stocks to keep rising, albeit at a slower pace. Among individual stocks, Square rose 7% after the payments company agreed to buy Australia’s Afterpay—which allows users to pay for goods in interest-free installments—in an all-stock deal valued at around $29 billion. Also in M&A, UK engineering firm Meggitt, which specializes in the aerospace, defense and energy industries, shot 55% higher in London after agreeing to a £6.3 billion takeover, equivalent to around $8.8 billion, by Parker Hannifin. Investors said sentiment in broader markets was given a boost by comments from the Chinese securities regulator. The China Securities Regulatory Commission said it would cooperate with Washington on US listings, after the Securities and Exchange Commission said it would increase scrutiny of Chinese companies that aim to sell shares in the US. 7.35am: Gains predicted at open US stock indices look set to recover most of Friday’s reverses when the new trading week starts later. The Dow Jones industrials Average is expected to open 145 points higher at 35,080, while the broader S&P 500 is seen starting 23 points firmer at 4,418, and the tech-laden Nasdaq 100 is tipped to rise 68 points to 15,028. It is purchasing managers’ index (PMI) day worldwide so traders will be looking for the Markit manufacturing PMI to provide a temperature gauge of the US economy. Also out today is the Institute of Supply Management’s (ISM) manufacturing PMI. “The ISM index has been above 60% for five consecutive months and in six of the past seven. With the supply side striving to keep up with demand, activity should be firm enough to generate another elevated reading. The supplier delivery component merits special attention because of insights it might provide on supply-chain developments. We also will be interested in the employment component, hoping for a pickup from the sub-50% reading in June,” said Daiwa Capital Markets. A busy week is also in store on the earnings front, with 150 companies in the S&P 500 reporting, along with a further 82 from the STOXX 600, among others, according to Deutsche Bank (NYSE:DB)’s Jim Reid. Six things to watch on Monday: Square inc (NYSE:SQ), the payments firm of Twitter Inc (NYSE:TWTR) co-founder Jack Dorsey, will purchase buy now, pay later (BNPL) pioneer Afterpay Ltd for $29 billion, creating a global transactions giant in the biggest buyout of an Australian firm. HSBC Holdings beat forecasts on Monday with first-half pretax profit that more than doubled from last year when the London-listed global bank set aside $7 billion to cover coronavirus pandemic-related bad loans. Foot Locker Inc said it will buy two smaller shoe store chains for a total of about $1.1 billion in cash as it looks to expand its business beyond malls and extend its reach in Asia. The company is buying California-based WSS for $750 million and Japanese streetwear retailer Atmos for $360 million. Dutch brewing giant Heineken said it expects the coronavirus pandemic to weigh on key Asian markets for the rest of the year and rising costs to dent margins after posting a better than expected doubling of first-half earnings. Ferrari (NYSE:RACE) has stuck to its main 2021 targets despite tripling second-quarter core profits as shipments recovered from pandemic-hit trading in the same period last year. The Italian luxury carmaker increased its industrial free cash flow guidance to around 450 million euros ($535 million) this year, up from its previous forecast of around 350 million euros. Grab, Southeast Asia's biggest ride hailing-to-food delivery group's first-quarter adjusted net sales rose 39% to a record $507 million and the Singapore-based firm reduced its losses on the back of a strong performance in its deliveries business.