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Wall Street jumps, financials take the lead

Published 09/28/2020, 07:31 AM
Updated 09/28/2020, 03:35 PM
© Reuters. A nearly empty trading floor is seen as preparations are made for the return to trading at the NYSE in New York

By Stephen Culp

(Reuters) - Wall Street surged on Monday in a broad rally as investors sought bargains among sectors hardest-hit by the coronavirus recession, now limping toward its ninth month.

All three major U.S. stock indexes were solidly higher on the heels of the longest weekly losing streak in over a year for both the S&P 500 and the Dow.

But energy (SPNY) financials (SPSY) and industrials (SPLRCI), which suffered the most bruising blows from the economic shutdown, enjoyed among the largest percentage gains among major S&P 500 sectors, all of which were up more than 1%.

"Investors are looking for opportunities," said Oliver Pursche, president of Bronson Meadows Capital Management in Fairfield, Connecticut. "And financials and industrials have underperformed in the last few months, so it's not surprising to see rotation into them."

But even with Monday's jump, the indexes are only days away from closing the books on their first monthly declines since March, when markets were sent into a freefall by pandemic-related lockdowns.

"September is usually a rough month for markets," Pursche added. "But people are going to get their third-quarter statements and be very happy with the sharp rebound."

Indeed, with the third quarter's expected gains, the S&P is on course for its best two-quarter winning streak since 2009, and the Nasdaq is set for its largest advance since 2000.

Market leaders Apple Inc (O:AAPL), (O:AMZN) and Microsoft Corp (O:MSFT) once again gave the biggest boost to the S&P 500 and the Nasdaq, and 29 of 30 constituents of the blue-chip Dow were in the black.

Data released over the weekend showed Chinese industrial profits grew for the fourth straight month, evidence of progress in the global recovery from the pandemic recession.

The lack of a COVID-19 vaccine and an additional fiscal stimulus package from Washington nearly two months after emergency unemployment expired for millions of Americans have weighed on the markets in recent sessions.

The Dow Jones Industrial Average (DJI) rose 493.96 points, or 1.82%, to 27,667.92, the S&P 500 (SPX) gained 56.1 points, or 1.70%, to 3,354.56 and the Nasdaq Composite (IXIC) added 167.42 points, or 1.53%, to 11,080.98.

American Airlines Group Inc (O:AAL) announced late Friday that it has secured a $5.5 billion government loan, and might access more. The news sent the commercial carrier's stock up 4.5%.

This also gave a lift to the broader airline sector, which was badly stricken by pandemic-related restrictions and plunging demand. The S&P 1500 Airlines index <.SPCOMHOME> gained 4.4%.

Boeing (N:BA) extended Friday's gains, rising 6.1% after Federal Aviation Administration Chief Steve Dickson said the agency was set to conduct a 737 MAX evaluation flight this week.

Devon Energy Corp (N:DVN) said it would buy peer WPX Energy Inc (N:WPX) for $2.56 billion, sending their shares jumping 11.3% and 15.9%, respectively.

Ride-hailing platform Uber Technologies Inc (N:UBER) rose 3.2% after a judge ruled the company could resume operations in London.

Advancing issues outnumbered declining ones on the NYSE by a 6.30-to-1 ratio; on Nasdaq, a 3.00-to-1 ratio favored advancers.

© Reuters. A nearly empty trading floor is seen as preparations are made for the return to trading at the NYSE in New York

The S&P 500 posted 6 new 52-week highs and no new lows; the Nasdaq Composite recorded 41 new highs and 25 new lows.

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