Wall Street Claws Back Some Losses 09/28 16:16
Stocks notched solid gains Monday as Wall Street clawed back some of its
sharp and sudden September losses.
(AP) -- Stocks notched solid gains Monday as Wall Street clawed back some of
its sharp and sudden September losses.
The S&P 500 rose 1.6%, its third straight gain. The benchmark index was
coming off its first four-week losing streak in more than a year and is on
track to close out September with a loss of 4.2% after five months of gains.
The market's gains were widespread, with more than 90% of the stocks in the
S&P 500 higher. Big Tech stocks, which have been getting the most criticism for
getting too expensive following their strong pandemic run, did the heaviest
lifting. Several companies announced big mergers and acquisitions, which helped
to push markets higher.
Optimism that Democrats and Republicans in Congress will reach a deal on
another coronavirus relief bill also helped put investors in a buying mood,
said Nela Richardson, investment strategist at Edward Jones.
"There's real concern about a second wave of infections, concern that we're
just riding the coattails of growth that happened after the economy opened up
in May," Richardson said. "Anything that looks like new lifeblood for the
economy is read as a positive stimulus."
The S&P 500 rose 53.14 points to 3,351.60. The Dow Jones Industrial Average
gained 410.10 points, or 1.5%, to 27,584.06. The Nasdaq composite climbed
203.96 points, or 1.9%, to 11,117.53. Traders also bid up smaller company
stocks, sending the Russell 2000 small-cap index up 35.43 points, or 2.4%, to
One of the big worries hurting stocks this month has been fears that the
market climbed too high and got too expensive through its 60% rally from late
March into early September. But several companies announced big mergers and
acquisitions, which show that at least some CEOs see value at current prices.
Energy stocks made broad gains after Devon Energy and WPX Energy agreed to
combine in an all-stock deal. Devon Energy led the S&P 500 companies higher,
climbing 11.1%. WPX Energy rose 16.4%.
Cleveland-Cliffs jumped 11.6% after it said it will buy the U.S. business of
steelmaking and mining giant ArcelorMittal for $1.4 billion. ArcelorMittal's
U.S.-listed stock rose 10.6%.
Another strong gainer was Uber, which rose 3.2% after it won an appeal that
will allow it to keep operating in London.
Big Tech stocks powered much of the S&P 500's gains. Amazon climbed 2.5%,
Apple rose 2.4% and Microsoft gained 0.8%. These companies are massive, which
gives their stock movements much more sway over the S&P 500 and broad-market
indexes than other stocks.
Several factors have been behind the S&P 500's abrupt drop this month, which
halted a remarkable return to record heights for Wall Street even as the
pandemic continued to rage.
Many of those factors are still in place, which means analysts along Wall
Street say the tumultuous trading may not be over.
"We're not out of the woods yet," Richardson said. "Investors should expect
volatility, especially as we get closer to the election."
Investors are still waiting for Congress to deliver another round of support
for the economy after extra unemployment benefits for workers and other
stimulus expired. Tensions are still rising between the United States and
China. And the upcoming U.S. presidential election still means plenty of
uncertainty for investors, from what it could do to corporate tax rates to how
long markets will need to wait until after Election Day to discover the winner.
The latest monthly employment report from the government on Friday could
help shed some more light on the economic recovery, but it could also mean more
volatility for the markets, said Brad McMillan, chief investment officer for
Commonwealth Financial Network..
"This week's going to be all about the jobs numbers, that's the elephant in
the room," he said.
Countering those uncertainties, though, is the tremendous support that the
Federal Reserve is continuing to provide markets and the economy. So are
investors' rising hopes that a vaccine for COVID-19 could become available as
soon as early 2021.
European stock markets rallied broadly. The Germany DAX returned 3.2% and
the French CAC 40 rose 2.4%. The FTSE 100 in London gained 1.5%.
In Asia, Japan's Nikkei 225 rose 1.3%, as did South Korea's Kospi. The Hang
Seng in Hong rose 1%, and stocks in Shanghai slipped 0.1% after China's
statistical bureau reported that industrial profits rose 19% in August from a
year earlier, as the economy recovered from the pandemic downturn.
The yield on the 10-year Treasury held steady at 0.66%.