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S&P 500 Makes Strong Start to October as Merck Covid Pill Lifts Sentiment

Stock MarketsOct 01, 2021 04:17PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 rose sharply Friday,  as positive results from Merck's Covid-19 pill stoked investor optimism and triggered a sea of green on Wall Street following a sloppy September.

The S&P 500 rose 1.1%, the Dow Jones Industrial Average gained 1.4%, or 482 points, the Nasdaq was up 0.8%.

Merck & Company Inc (NYSE:MRK) reported that its experimental Covid-19 pills cut the risk of death and hospitalization by 50% in a study, sending its share price more than 8% higher.

The positive Covid-19 treatment news stoked investor optimism about the recovery amid an ongoing drag from the impact of the Delta variant.

Cyclical stocks including materials and energy took the lead, with the latter helped by expectations that energy prices will continue to climb to as high as $100 a barrel.

“If all these factors come together, oil prices could spike and lead to a second round of inflationary pressures around the world,” Bank of American said in a note.

Exxon Mobil (NYSE:XOM) was up nearly 4% after raising its forecast on third-quarter earnings, citing higher oil and gas prices. The oil major said higher energy prices could boost earnings by as much as $1.5 billion.

Bets on reopening stocks – those that benefit from easing pandemic restrictions – renewed, with cruise and airlines companies leading the way.

United Airlines Holdings (NASDAQ:UAL), American Airlines Group (NASDAQ:NASDAQ:AAL), Carnival (NYSE:CCL) and Norwegian Cruise (NYSE:NCLH) were sharply higher.

Big tech, which fell victim to rising interest rates recently, found its footing.  

Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOGL), and Microsoft (NASDAQ:MSFT) ended in the green. Amazon.com (NASDAQ:AMZN) closed lower.

On the economic front, the faster pace of inflation shows little sign of abating, but the consumer, which makes up about two-thirds of the economy, continues to spend.

The Federal Reserve's preferred inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy, rose 3.6% in the 12 months through September.

Consumer spending in July rose by 0.8% month-on-month, from a 0.1% decline in the prior month.

“We remain constructive on consumer spending in the coming quarters. Even as the impulse from fiscal stimulus targeted at households fades, labor market  income and a savings cushion should support continued spending,” Morgan Stanley (NYSE:MS) said.

In Washington, meanwhile, House Speaker Nancy Pelosi was forced to delay a planned vote on the $1 trillion bipartisan infrastructure package amid ongoing wrangling within the Democratic caucus.

The House was hoping to pass the bipartisan infrastructure package and the $3.5 trillion reconciliation bill simultaneously, as part of a two-track strategy. But Sen. Joe Manchin said he would support a reconciliation package worth only $1.5 trillion, well short of the proposed $3.5 trillion. 

Looking ahead, investors anticipate another wild week amid several events that could dominate direction in the broader market, including the Federal Reserve's September meeting minutes, the OPEC meeting, and the monthly jobs report to round out the week. 

"Since labor supply issues became apparent this spring, we've been eagerly awaiting September payrolls, expecting them to show a sharp acceleration in the pace of hiring," Jefferies (NYSE:JEF) said in a note.

S&P 500 Makes Strong Start to October as Merck Covid Pill Lifts Sentiment
 

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Comments (11)
Mir Muhammad
Mir Muhammad Oct 03, 2021 12:08AM ET
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hello
Mohd Izhar Muslim
Mohd Izhar Muslim Oct 02, 2021 11:35AM ET
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This is great on October
Pratt Man
Pratt Man Oct 01, 2021 7:59PM ET
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Every single ballot recount so far has found more votes for Biden, so the technically the only voter fraud was for Trump.
Forex Harbingers
Forex Harbingers Oct 01, 2021 7:41PM ET
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Is it just me that notices the fact that under Trump we had smaller well funded options for a vaccine, and then when Biden came in surprise, surprise, the Big Pharma companies won out, or is that just me? Weird, and we are having problems and need new options, and SURPRISE!! Its Merck, another Big Pharma Co. Wow
Pratt Man
Pratt Man Oct 01, 2021 7:41PM ET
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it's just you. The agreements that we have now are the ones Trump agreed to. X3
New Jazenevd
New Jazenevd Oct 01, 2021 6:38PM ET
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Our president is a senile fool and our economy goes to dumpster. Big part of population are brainwashed fools while ruling elites are mostly crooks. However, the market will go higher. This is the last refuge, use it.
Michael Angelo
Michael Angelo Oct 01, 2021 5:26PM ET
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And this is the last effort, from your news update, trying to write something about nothing we know but, BELIEVE US, otherwise all the app will be empty of articles. Thank you.
Special Forces
Special Forces Oct 01, 2021 4:40PM ET
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insurrectionists, anti science + anti maskers + anti vaxers, and now anti pill takers = ...help me out pls
frank zapper
frank zapper Oct 01, 2021 4:40PM ET
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omg what a drama queen u are. how about mostly peaceful protests as hard working Americans lose their business to violent looters. mail in ballots from dead people. i can go on.
Abhijit Rath
Abhijit Rath Oct 01, 2021 4:39PM ET
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so you are saying the market rallied some few points up because there is a news about covid pill wow 🤣🤣 See you next week when you connect this to some other things when it drops
Ezugwu Livinus Chinonso
Ezugwu Livinus Chinonso Oct 01, 2021 4:39PM ET
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Hi I thank you for allowing me to join this https://investing.com I will like to know more of this platform and I am hoping that this platform will pay me well.
Jeff Chevalier
Jeff Chevalier Oct 01, 2021 4:39PM ET
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You can't get half the population to get a shot, you think they'll pop a pill? They can put a bigger tracking device in a pill!
soho electronics
soho electronics Oct 01, 2021 4:29PM ET
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ok so it takes some BS news about some miracle pill?? wow this game is even better than monopoly! can't wait for Monday Asia opening, HK was closed today, how appropriate.... we are in for a wild ride again.
Zinzi Siswana
Zinzi Siswana Oct 01, 2021 4:29PM ET
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Bro youre right , all of the satan, magic pill from no where, tomorrow…. Satanly they are safer than corona virus vaccines!!.. From take a jab to just swallow pills !!This is evil !!..
 
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