US close: Major indices shake off previous week's volatility

Wall Street stocks closed higher on Monday as market participants shook off anxiety stemming from last week's speculative retail trading mania.

At the close, the Dow Jones Industrial Average was up 0.76% at 30,211.91, while the S&P 500 was 1.61% firmer at 3,773.86 and the Nasdaq Composite saw out the session 2.55% stronger at 13,403.39.

The Dow closed 229.29 points higher on Monday, extending modest gains recorded in the final session of a volatile week for stocks.

In focus on Monday was news that ten Republican senators had pleaded with President Joe Biden to consider implement a smaller, more scaled back Covid-19 relief package than his current $1.9trn plan.

The opposition's call came after House Speaker Nancy Pelosi stated the chamber would push to pass a budget resolution, the first step in approving the legislation through reconciliation without votes from the GOP.

Corporate earnings will be in focus again this week, with the likes of Alphabet, Amazon, Snap, Exxon, Biogen, Pfizer and Chipotle set to update the market on their latest quarterly performances later in the week.

GameStop, the heavily-shorted stock at the centre of last week's frenzied trading, closed 30% lower on Monday, as the Reddit-led trading boom has now seemingly spread to other areas of the market, with futures contracts for silver surging 11% - their biggest single-day jump in over a decade.

On the macro front, manufacturing sector activity in the US continued to surge ahead at the start of the year with the majority of respondents to a closely-followed survey reporting very strong demand. The Institute for Supply Management's factory sector purchasing managers' index dipped from a December reading of 60.5 to 58.7 for January.

Elsewhere, IHS Markit's manufacturing PMI rose to 59.2 in January from 57.1 in December, slightly higher than the flash estimate and market expectations for a print of 59.1.

Lastly, US construction spending rose a modest 1% in December, according to the Commerce Department, as strength in home building offset continued weakness in non-residential construction. The increase follows a 1.1% gain in November.