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Wall Street kicks off October with broad rally, boosted by economic cheer

EconomyOct 01, 2021 06:45PM ET
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© Reuters. FILE PHOTO: A Wall Street sign is pictured outside the New York Stock Exchange in New York, October 28, 2013. REUTERS/Carlo Allegri

By Stephen Culp

NEW YORK (Reuters) - Wall Street stocks surged to a higher close on Friday, entering the final quarter of 2021 in a buying mood boosted by positive economic data, progress in the battle against COVID, and Washington developments on the potential passage of an infrastructure bill.

All three major U.S. stock indexes seesawed earlier in the session, but began trending higher by late afternoon, led by economically sensitive cyclicals.

The rally gained momentum after the White House announced U.S. President Joe Biden was getting more involved in negotiations over the infrastructure spending bill being debated on Capitol Hill.

Even so, all three indexes ended below last Friday's close, falling between 1.4% and 3.2%, with the S&P 500 and the Nasdaq Composite posting their biggest weekly percentage drops since February.

"There was a broad based recovery today. Markets were not fixated today on new taxes or tapering," said David Carter, chief investment officer at Lenox Wealth Advisors in New York.

"In a shift from the past few weeks there's been no big news from Washington, so markets were forced to focus on positive economic data and a new COVID medication."

Merck & Co Inc revealed that a recent study showed its experimental oral drug for COVID-19 cut risk of death and hospitalization by about 50%, sending its shares jumping 8.4% and boosting economic reopening sentiment.

While Biden signed into law a stop-gap bill to keep the government running through Dec. 3, lawmakers only succeeded in kicking the can down the road.

This lack of resolution prompted rating agency Fitch to warn that the United States' 'AAA' credit rating could be at risk.

"Markets don't believe the debt will be downgraded or a debt ceiling deal won't be struck but it still adds uncertainty which is always a problem for the markets," Carter added.

A host of economic data released on Friday showed increased consumer spending, accelerated factory activity and elevated inflation growth, which could help nudge the U.S. Federal Reserve toward shortening its timeline for tightening its accommodative monetary policy.

Philadelphia Fed President Patrick Harker repeated his view expressed in a speech on Wednesday that he believes the central bank should begin tapering its asset purchases "soon," but reiterated that he did not expect it to hike key interest rates until late next year or early 2023.

The Dow Jones Industrial Average rose 482.54 points, or 1.43%, to 34,326.46; the S&P 500 gained 49.5 points, or 1.15%, at 4,357.04; and the Nasdaq Composite added 118.12 points, or 0.82%, at 14,566.70.

Of the 11 major sectors in the S&P 500, all but healthcare stocks ended higher.

The sector was weighed down by a 11.4% drop in shares of COVID vaccine maker Moderna (NASDAQ:MRNA) Inc in the wake of the Merck news.

Economic optimism prompted value stocks to outperform growth, and transports and smallcaps to fare better than the broader market.

Advancing issues outnumbered decliners on the NYSE by a 2.17-to-1 ratio; on Nasdaq, a 1.63-to-1 ratio favored advancers.

The S&P 500 posted 10 new 52-week highs and nine new lows; the Nasdaq Composite recorded 63 new highs and 136 new lows.

Volume on U.S. exchanges was 11.02 billion shares, compared with the 10.70 billion average over the last 20 trading days.

Wall Street kicks off October with broad rally, boosted by economic cheer
 

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Comments (14)
Mart Bab
Rubberduck1973 Oct 03, 2021 9:00AM ET
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Ehem. So no Microsoft chip in Merck and co’s pill hey? Doesn't change anything. And by the way, 50%? So every one out of 2 people still dei. Get vaccinated. Only way out of this mess
Jack Sharma
Jack007 Oct 02, 2021 12:08AM ET
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all the shorters want to curse economy now.
perplexed76 .
perplexed76 . Oct 02, 2021 12:08AM ET
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economy data worsen evey single week
perplexed76 .
perplexed76 . Oct 01, 2021 10:33PM ET
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the sponsor of the rally is beneficent uncle Jerome
William Bailey
William Bailey Oct 01, 2021 2:01PM ET
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Time to pay the credit card off that defence contractors and billionairs profited from, no raising it, make the billionairs pay down the debt
TheEnd IsNigh
TheEnd IsNigh Oct 01, 2021 1:54PM ET
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Economic and societal collapse now or later? Those are the two choices. People who are alive and conscious of the repercussions will say kick the can to the next generation. And so on. Until one day...the can reaches the edge of the fiscal cliff and goes over anyways.
Nordin Mohamad
Nordin Mohamad Oct 01, 2021 1:54PM ET
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enjoy while it last....
Dave Jones
Dave Jones Oct 01, 2021 1:40PM ET
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there will always be a ready buyer for us treasuries. jer is standing by with the money printer
Vincenzo Tilotta
Vincenzo Tilotta Oct 01, 2021 1:40PM ET
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Of course, Jerry has been doing that for the last 10 years, why would he stop now
Mitchel Pioneer
Mitchel Pioneer Oct 01, 2021 1:20PM ET
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Friday FRAUD in living color, as the criminal manipulation goes pedal to the metal.  Another day of comedy in the biggest investment JOKE in history.  Gotta get rid of those losses, no matter how flagrantly it has to be accomplished, so America can be sent into another weekend with a financial knife in their back.  Welcome to the US Ponzi Scheme, laughingstock of the investing world.
Dave Jones
Dave Jones Oct 01, 2021 1:20PM ET
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one day it will all fall apart
Wilks Campbell
Wilks Campbell Oct 01, 2021 12:18PM ET
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there was a pill treatment working ok when the pandemic just started in 2019! Looks like that pharma was on the wrong queue for the buffet!
Wilks Campbell
Wilks Campbell Oct 01, 2021 12:15PM ET
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look like the pharma taking buffet
Wilks Campbell
Wilks Campbell Oct 01, 2021 12:14PM ET
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if the pharma taking buffet !
Ricardo Diogo
Rcd72 Oct 01, 2021 11:40AM ET
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bargain??? what bargain???
Ricardo Diogo
Rcd72 Oct 01, 2021 11:39AM ET
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merck is 8 ,%on silly undocumented trial...😭😭😭😭 probably fake one it had 14 patients...
Aziz Saud
Aziz Saud Oct 01, 2021 11:37AM ET
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bull trap
Mitchel Pioneer
Mitchel Pioneer Oct 01, 2021 11:22AM ET
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This market is a criminally manipulated joke.
Ac Tektrader
Ac Tektrader Oct 01, 2021 11:22AM ET
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you probably shouldn't be trying to trade this market without a lot of experience.
 
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