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Stocks - Wall Street Surges at the Close as Financials, Tech Jump

Published 03/02/2020, 03:56 PM
Updated 03/02/2020, 04:08 PM
© Reuters.

© Reuters.

By Yasin Ebrahim

Investing.com – Stocks made a bullish start to the week Monday, shrugging off an uptick in coronavirus deaths in the U.S. amid a surge in tech and financials.

The S&P 500 rose 4.6%, the Nasdaq Composite surged 4.5% and Dow Jones Industrial Average rose 1,294 points, or 5.1%. The Dow notched its biggest daily point gain ever, as did the S&P. That is still short of the biggest percentage gain for the Dow of 11.08% and 11.58% for the S&P 500 on Oct. 13, 2008.

Officials in Washington state said Monday four new patients had died from Covid-19, taking the total number of deaths in the U.S. to six. But with growing bets the Federal Reserve will cut rates aggressively this month, investors piled into stocks, especially in late trading. The major indexes closed at their highs of the session.

A 50-basis-point Fed rate cut is fully priced in for March, according to Investing.com's Fed Rate Monitor Tool.

In tech, Apple (NASDAQ:AAPL) was the standout as investors cheered an upgrade from Wall Street on the iPhone maker.

Oppenheimer upgraded its rating on Apple (NASDAQ:AAPL) to outperform from perform on expectations that demand for Apple would continue despite uncertain times. Apple) nearly 9%.

While infections continue to mount worldwide, Covid-19 cases in China continued to slow, stoking investor hopes that disruptions to supply chains in the country will be resolved sooner rather than later.

WHO Director-General Tedros Adhanom Ghebreyesus said China reported 206 new cases of Covid-19, on Sunday, the lowest number of new cases since Jan. 22.

Financials, mostly banking stocks, also led the broader market higher, after catching a bid into the close thanks to a surge in bond yields.

JPMorgan (NYSE:JPM), Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC) rose sharply as the 10-Year Treasury yield rebounded from record lows, rising to 1.157% from lows of 1.03%.

On the economic front, U.S. manufacturing activity remained sluggish as data showed the ISM Manufacturing Index fell to a reading of 50.1 in February, short of economists' estimates of 50.5.

Elsewhere, Twitter (NYSE:TWTR) surged 8% on reports that Elliott Management founder Paul Singer was considering lobbying to replace Twitter chief Jack Dorsey.

And Costco Wholesale (NASDAQ:COST) jumped 10% following virus-scare stockpiling at its stores seen over the weekend.

Nio (NYSE:NIO), however, proved an exception to the rally, closing down 0.7%, after Citigroup (NYSE:C) downgraded the Chinese electric automaker on worries the recent funding deal could prove short-term relief but longer-term pain should sales weakness continue.

Latest comments

is it will continue going up? Or will fall down?
I don’t think it’ll continue going up. The virus news will continue t be an EXCUSE for hectic moves until it stopped or a drug was confirmed. Otherwise, I think, the market will oscilate within the range of the last 8 days.
going up a bit more to allow connected investors to exit...but the common sheep will get sheared after. Seen this movie twice before.
Unless QE is a cure then yes it will go up.
We're heading for negative interest rates and a massive QE program. Don't be (F)ooled if you think otherwise.
We're heading for negative interest rates and a massive QE program. Don't be fooled if you think otherwise.
Yup.. Oil is booming and precious metals under pressure. WS found a cure..
my 1275 s&p prediction got killed, still playing ups and downs, big swings to continue
2975 s&p*
The CoronaVirus IS the "black swan" event that will be the catalyst to a larger market downturn. This "rally" off the March 2009 lows has run its course. It is LATE in the credit cycle, and a 30-50% correction (peak to trough) will likely run 12-24 months...with steep "false" rallies while the broader market grinds lower. You don't rally for nearly 11 years without major consolidation. Cycles still exist and they still matter, regardless of how "accommodative" the Fed will be.
Sounds like you've got a handle on it David. Thanks!
I wouldn't count on a 50 basis rate cut, until some real sign of impact to the US economy all there is now is media hype, just like with the pandemic from coronavirus which isn't proven yet.
Markets will tank if they don't cut at least 50 basis points. "Markets" have already priced in a 50 basis point cut. This entire bubble is a disaster you're slow if you honestly believe this is a healthy market.
you're expecting the sell off to continue?
Every time the market rally up, we see this old man. We still need to see that picture of the finger pointing up.
great
Sick
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