Stocks extend rally, with the Dow up 500 points as banks and tech rise

Stocks rose sharply on Monday as Wall Street built on the strong gains from the previous session.

The Dow Jones Industrial Average traded 456 points higher, or 1.7%. The S&P 500 gained 1.5% along with the Nasdaq Composite.

Shares of major tech names rose broadly. Facebook and Amazon climbed 0.9% and 2%, respectively. Apple and Netflix were up more than 1% each. Alphabet advanced 1.6% and Microsoft traded higher by 1.1%.

Bank stocks also contributed to Monday’s gains. JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley all popped more than 1%.

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. The chamber could vote on the bill as soon as next week. Still, that price tag is well above what Republican leadership has indicated it will support for a new package.

Investors also cheered a slew of corporate dealmaking activity. Devon Energy and WPX Energy announced they will mover forward with a merger of equals, sending their stocks up 5% and 8.2%, respectively. Meanwhile, Caesars Entertainment disclosed a cash offer to buy London-based William Hill for 2.9 billion pounds.

Shares of companies that would benefit from the economy reopening caught a bid. Carnival Corp and American Airlines were up 1.8% and 2.8%.

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 4.4% and 5.8%, respectively, while the Nasdaq has dropped 7.3%. 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 Nasdaq were still down for the fourth straight week as the pandemic continues to keep investors on edge. New daily coronavirus cases topped 1,000 in New York state on Saturday, marking the first time the state’s new infections have broken the 1,000 threshold since early June.

Credit: CNBC

Leave a Reply