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Dow Racks Up Gains as Tech Claws Back Losses, Value Shines Ahead of Election

Stock MarketsNov 02, 2020 04:20PM ET
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© Reuters

By Yasin Ebrahim

Investing.com – The Dow racked up gains Monday, on a late-day rebound in tech from session lows and strength in value stocks ahead of the U.S. election on Tuesday.

The Dow Jones Industrial Average rose 1.60%, or 423 points. The S&P 500 was up 1.22%, while the Nasdaq Composite rose 0.42%.

Value stocks across sectors like energy, materials, and industrials were in favor as investors bet that a Joe Biden presidential victory could boost the economy. 

Ahead of the U.S. presidential election, national polls suggest that former Vice President Joe Biden maintained his strong lead over the weekend against President Donald Trump in key battleground states.

Some suggested that a so-called blue wave – Democrats taking control of the White House and Congress – would prove a short-term gain to the economy as a bigger stimulus package would likely be rolled out, but growth may suffer beyond 2021 amid a possible hike in taxes. 

"In the near-term, we see a blue wave as the most constructive outcome for the economy, with more than $3tn in fresh fiscal stimulus contributing to robust GDP growth to 2021 …  but beyond 2021 time-frame, the implications of a blue wave become much less market friendly," Action Economics said in a note. "Once Democrats have dealt with COVID and the economic fallout, their next policy priority will probably be healthcare expansion financed by tax increases."

Energy, led the move higher as oil prices climbed despite lingering concerns about the pandemic impact to demand as several European countries including Germany, France, Belgium, Ireland, Austria and Belgium returned to lockdown.

Tech, meanwhile, added impetus to the rally as the Fab 5 rebounded from session lows. Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN), Facebook (NASDAQ:FB) and Microsoft (NASDAQ:MSFT) ended off the day's lows, while Google-parent Alphabet (NASDAQ:GOOGL) closed in the green.

Clorox (NYSE:CLX), meanwhile, rose 5% after delivering a quarterly earnings beat on strong sales of household goods.

Investor sentiment was also boosted by data showing manufacturing activity hit its highest level in nearly two years.

The Institute for Supply Management said Monday that its manufacturing index rose by 3.9% to 59.3% last month, topping economists' estimates of 55.8.

The seven-day average of new daily cases in the U.S. now the highest the country has seen, at 81,336 cases, The Wall Street Journal reported.

In deal news, Dunkin Brands Group Inc (NASDAQ:DNKN) surged 6% after Inspire Brands announced a $11.3 billion take-private deal for the company.

Under Armour (NYSE:UAA) ended 4% higher after Stifel upgraded the stock to buy from hold and lifted its price target to $17 from $11, citing an improved balance sheet 

Dow Racks Up Gains as Tech Claws Back Losses, Value Shines Ahead of Election
 

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Comments (14)
perplexed76 .
perplexed76 . Nov 02, 2020 11:36PM ET
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the market has found a new excuse to rise... Biden was bad two weeks ago, now Biden is great
Karan Kapadia
Karan Kapadia Nov 02, 2020 8:39PM ET
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Trump will win like 2000 court case between Bush and Algore
Nicolas Martinez
Nicolas Martinez Nov 02, 2020 7:32PM ET
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Fracking shares rising....mmmm..Trump wave is coming
yusof jaafar
Yusof Nov 02, 2020 7:32PM ET
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I dont think market are expecting JOE win.
Jim Horn
Jim Horn Nov 02, 2020 7:32PM ET
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It's pricing in a Blue wave, huge stimulus...
Franco Dominguez
Franco Dominguez Nov 02, 2020 7:17PM ET
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now, its better to posted LOSSES than PROFITS. BA didnt sell anything since 2019 and going up. PYPL made a lot of money, going down.
James Bell
James Bell Nov 02, 2020 6:43PM ET
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I'm voting for higher taxes. I'm voting for higher crime and less police. I'm voting for no access to healthcare for the middle class. I'm voting for elimination of tax benefits for 401(K)s and IRAs. I'm voting for Biden. 🤣
Plopseven Schwartz
Plopseven Schwartz Nov 02, 2020 6:43PM ET
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I love seeing this copypaste ten times a day, ya donkey
Ben Ma
Ben Ma Nov 02, 2020 6:06PM ET
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there is no value in this overpriced market
New Jazenevd
New Jazenevd Nov 02, 2020 6:06PM ET
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Perhaps, journalists do not know the difference between “value” and “value stocks” and they confuse readers also not familiar with this difference.
New Jazenevd
New Jazenevd Nov 02, 2020 6:01PM ET
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Propaganda coverage. “Blue wave” would mean higher taxes on US corporation and domestic industrial companies, stocks performing very well today, would never go up by this factor. Also, any impersonal observer could notice that US oil stocks were very strong today too, and, fo sure, they would not benefit by dems in power.
Ryan Hanson
Ryan Hanson Nov 02, 2020 6:01PM ET
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A one day rally on oil stocks doesn’t mean anything. Oil prices are declining right now due to higher yields and lower demand. Has nothing to do with politics.
New Jazenevd
New Jazenevd Nov 02, 2020 6:01PM ET
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Ryan Hanson  you missed the point. I commented on the article that said clearly enough that today stock performance was directly caused by politics.
Bryan Cooper
Bryan Cooper Nov 02, 2020 5:44PM ET
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a blue wave would be good for one year only. after that govt spending would be a drag on the economy. investors are trying to a make thing from a lousy outcome.
Paolo Sarvia
Paolo Sarvia Nov 02, 2020 5:44PM ET
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Govt spending? Serious? Who drilled the most huge hole in the fed budget ever? C'mon!
New Jazenevd
New Jazenevd Nov 02, 2020 5:44PM ET
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Paolo Sarvia  Obama and pelosi
Robert Cox
Robert Cox Nov 02, 2020 5:44PM ET
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The current administration by getting tcorporate taxation for the sake of their own personal gains, thereby destroying the US's largest source of tax revenue!!!
Randall Wagner
Randall Wagner Nov 02, 2020 5:43PM ET
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Value stocks are due and in rotation, has nothing to do with Biden.  Market is up therefore predicting a Trump victory.  Sun is going down tonight... Biden victory?
John Oakes
John Oakes Nov 02, 2020 5:07PM ET
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"Badakathcare"
ed ward
ed ward Nov 02, 2020 4:44PM ET
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democrats sound worried, they must have seen trump rise 5 points in the polls in the past week and know their demented corrupt candidate is struggling and not even leaving his basement. i have seen democrat cult members putting more effort to spam this site than biden is putting into his own campaign.
ed ward
ed ward Nov 02, 2020 4:44PM ET
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you mean according to the left-leadning reuters poll, which shoes that trump is within margin of error to biden, up compared to last week, and ahead compared to 2016?
Plopseven Schwartz
Plopseven Schwartz Nov 02, 2020 4:44PM ET
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ed ward You’re right. Trump landslide. No need for you to vote.
Luke Selway
Luke Selway Nov 02, 2020 4:42PM ET
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Trump 2020 🇺🇸
Michael Bartholomew
Michael Bartholomew Nov 02, 2020 4:42PM ET
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if biden wasn't a bigger lover you might have an argument. remember when biden dropped out of 88 race for plagiarism?
Anil Soni
Anil Soni Nov 02, 2020 4:39PM ET
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Gold
 
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