por admin » Lun Sep 28, 2020 3:02 pm
Dow closes more than 400 points higher to start the week, led by banks and tech
PUBLISHED SUN, SEP 27 20206:08 PM EDTUPDATED 2 MIN AGO
Fred Imbert
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Yun Li
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Stocks rose sharply on Monday as Wall Street built on strong gains from the previous session amid hope for a new deal on U.S. fiscal stimulus and several corporate deals being struck.
The Dow Jones Industrial Average traded 474 points higher, or 1.8%. The S&P 500 gained 1.8% and the Nasdaq Composite climbed 1.9%.
Sentiment on Wall Street got a boost after House Speaker Nancy Pelosi said Sunday a last-minute coronavirus aid deal remains on the table as House Democrats try to forge ahead on a smaller aid package costing about $2.4 trillion. Pelosi also said she and Treasury Secretary Steven Mnuchin are set to talk on Monday. Still, that price tag is well above what Republican leadership has indicated it will support for a new package.
“While House Speaker Pelosi and Treasury Secretary Mnuchin are scheduled to resume talks, it is likely that many of the House Democrats facing tough upcoming election battles are growing eager for a resolution,” said Katie Nixon, CIO at Northern Trust Wealth Management. “We are very cautious in our optimism for a bill before November, but more confident that support will come either in a lame duck session or after inauguration.”
Investors also cheered a slew of corporate dealmaking activity. Devon Energy and WPX Energy announced they will move forward with a merger of equals, sending their stocks up 12.5% and 17.9%, respectively. Meanwhile, Caesars Entertainment disclosed a cash offer to buy London-based William Hill for 2.9 billion pounds. Shares of the casino operator rose 3.3%.
Shares of major tech names rose broadly. Facebook and Amazon climbed 0.8% and 2.5%, respectively. Apple was up 2.1%. Alphabet advanced 1.3% and Microsoft traded higher by 0.7%.
Bank stocks also contributed to Monday’s gains. JPMorgan Chase, Bank of America, Citigroup, Goldman Sachs and Morgan Stanley all popped more than 2%.
A look underneath the market surface also shows Monday’s gains have been broad based. FactSet data showed more than seven New York Stock Exchange-listed names traded higher for every decliner.
Still, major averages are on track to post steep losses for September, a historically weak month for stocks. The Dow and the S&P 500 have fallen nearly 3% and 4.4%, respectively, while the Nasdaq has dropped 5.8%. The declines followed a massive comeback from the coronavirus sell-off that saw the S&P 500 climb more than 50% from its March bottom.
“September has been rough for U.S. equity markets, particularly the Nasdaq,” wrote Mike Wilson, chief U.S. equity strategist for Morgan Stanley. “We expect it to bleed into October as visible risk events linger. Looking at the micro picture suggests this is just a correction in a new bull market and the best opportunities remain in reopening beneficiaries.”
Wall Street was also coming off a sharp rally on Friday, which saw the Dow pop more than 300 points. However, the S&P 500 and Dow were still down for the fourth straight week as the pandemic continues to keep investors on edge. The Nasdaq jumped nearly 2% last week.
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Correction: This story has been updated to reflect that the Dow and S&P 500 posted a weekly loss last week while the Nasdaq was higher during that time period.