por admin » Lun Sep 14, 2020 8:36 am
Stocks rise as tech shares gain, Nasdaq rebounds from worst week since March
PUBLISHED SUN, SEP 13 20206:00 PM EDTUPDATED 1 MIN AGO
Fred Imbert
@FOIMBERT
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Stocks rose on Monday, led by tech, amid a slew of corporate dealmaking activity as the market tried to recover from its first back-to-back weekly declines in months.
The Dow Jones Industrial Average traded 202 points higher, or 0.7%. The S&P 500 climbed 1% and the Nasdaq Composite jumped 1.5%.
Shares of Apple were higher by 2.2%. The market has been following in the footsteps of its rally leader. Apple shares are down 11% this month.
Tesla shares rebounded by more than 1%. The once-surging stock is down more than 25% in September after it failed to gain entry into the benchmark S&P 500, something investors were anticipating.
Tech sentiment was lifted by news of Nvidia buying chipmaker Arm Holdings from SoftBank for $40 billion. Nvidia will finance the deal through a combination of cash and common stock. Nvidia was up 8%. Other chipmakers also gained, including AMD, Micron and Skyworks.
Meanwhile, ByteDance rejected Microsoft’s bid to buy TikTok’s U.S. operations. Instead, ByteDance has chosen Oracle to be TikTok’s U.S. technology partner, and Oracle will take a significant stake in the business, according to a person familiar with the discussions. Oracle shares were up 4.8%.
Outside of tech, Gilead said it will acquire Immunomedics to expand its cancer treatments. It was a $21 billion cash deal. Immunomedics shares doubled. Shares of Immunomedics surged more than 100% on Monday. The iShares Nasdaq Biotechnology ETF was up 3%.
Sentiment also got a boost as AstraZeneca resumed phase three trials for its coronavirus vaccine in the U.K. following a halt for safety concerns.
The S&P 500 fell by 2.5% last week, marking the broader-market index’s worst one-week drop since June 26. That decline also marked the first time since May that the S&P 500 closed lower in two straight weeks. The benchmark is down 4.6% this month.
Those losses were driven in large part by a steep drop in tech, the best-performing market sector year to date. The S&P 500 tech sector plunged more than 4% for its biggest weekly loss since March.
The tech-heavy Nasdaq Composite was hit the hardest last week, down 4%. That was its worst week since March.
“The excessive technology froth from August has been wiped away, but in its wake, clear and ominous topping patterns like … developed,” said Frank Cappelleri, executive director at Instinet, in a note.
To be sure, Sean Darby of Jefferies thinks this decline in tech could be short-lived.
“There is nothing untoward about the fundamentals nor earnings expectations. An upside surprise would come from further dollar weakness, while the emergence of a vaccine and/or a rise in long-term rates would curb performance,” said Darby, a global equity strategist at the firm.
Investors are coming into the new week amid dwindling hope of lawmakers striking a deal on new fiscal stimulus.
Senate Majority Leader Mitch McConnell, R-KY, said on Friday the chances of Republicans and Democrats reaching a deal don’t “look that good right now.” Earlier this month, House Speaker Nancy Pelosi, D-Calif., said Democrats and the White House had “serious differences” over coronavirus aid.
Meanwhile, the number of U.S. coronavirus cases are growing by 5% or more in 11 states, according to a CNBC analysis of Johns Hopkins University data. Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said last week that recent coronavirus data was “disturbing.”
—CNBC’s Julia Boorstin and Jordan Novet contributed to this report.
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