Benchmarks closed higher on Monday as markets cheered news of President Trump’s positive response to Covid-19 treatment, and discharge from hospital. Investors also hope for a new stimulus package soon, as weak September jobs report and rise in new coronavirus cases underscore the urgency for further aid.
The Dow Jones Industrial Average (DJI) advanced 465.83 points, or 1.7%, to close at 28,148.64 and the S&P 500 gained 60.16 points, or 1.8%, to close at 3,408.60. The Nasdaq Composite Index closed at 11,332.49, adding 257.47 points, or 2.3%. The fear-gauge CBOE Volatility Index (VIX) increased 1.2%, to close at 27.96. Advancing issues outnumbered declining ones for 3.10-to-1 ratio on the NYSE and a 3.04-to-1 ratio on the Nasdaq favored advancers.
How Did the Benchmarks Perform?
All the 11 major sectors of the S&P 500 closed in the green, led by a 2.9% gain in the energy sector. The technology, health and materials sectors also rose 2.3%, 2.1% and 1.9%, respectively.
Among the Dow components, Amgen Inc.
AMGN
was the highest gainer, up 4.3%. Shares of Apple Inc.
AAPL
and The Travelers Companies, Inc.
TRV
also boosted the blue-chip index by closing 3.1% higher on Monday.
Overall, the S&P 500 posted 29 new 52-week highs and no new low, while the Nasdaq Composite recorded 112 new highs and 16 new lows.
Trump’s Tweet on Discharge from Hospital Boost Markets
On Monday afternoon, President Donald Trump tweeted that he would be discharged from Walter Reed National Military Medical Center, after a three-night stay. Investors cheered the news leading markets to rally and igniting hopes that experimental drugs used to treat the President for COVID-19 may become more widely available to the general citizens.
However, Dr. Sean Conley said on Monday that the president’s condition has “continued to improve” but he is not yet “out of the woods” and the next seven days will be crucial. He has also prescribed that Trump will receive the fifth and final dose of Gilead Sciences, Inc.’s
GILD
antiviral drug Remdesivir at the White House Tuesday night.
Shares of Regeneron Pharmaceuticals, Inc.
REGN
and Gilead Sciences surged 7.1% and 2.3%, respectively, on Monday after Dr. Conley said President Trump had been treated with Regeneron’s experimental antibody treatment for Covid-19. Regeneron holds a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Sell) stocks here.
Stimulus Aid Talks in Progress
On Monday, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin held a phone call and discussed in details the $2.2 trillion fiscal package. Pelosi’s chief of staff said that phone call was regarding “the justifications for various numbers” and “plan to exchange paper” in preparation of further discussions on the stimulus package scheduled on Oct 6.
Investors remain hopeful as Pelosi called on the airline industry to delay furloughs, saying additional relief for the industry is “imminent” and President Trump has already put pressure on the Congress over the weekend to get a deal done.
US Service Sector Picked Up Pace in September
On Monday, the Institute for Supply Management (ISM) reported that its non-manufacturing index rose to 57.8% in September from 56.9% in the month before. ISM’s report highlighted that September’s uptick was led by surge in new orders, as the sub-index jumped to 61.5% from 56.8% in August. Additionally, employment in the service sector also surged, rising from 47.9% in August to 51.8% in September and business activity index rose to 63% in September from 62.4% in the previous month.
Stocks that Made Headline
Hess to Divest Shenzi Field Stake in GoM for $505 Million
Hess Corporation
HES
recently agreed to divest 28% working interest in the Shenzi Field — located in the deepwater Gulf of Mexico (GoM) — to BHP Billiton of BHP Group
BBL
, an Australia-based company. The divestment is expected to fetch Hess $505 million. (
Read More
)
TC Energy Offers $1.48B Acquisition Deal to TC PipeLines
TC Energy Corporation
TRP
recently announced that it has offered to acquire all TC PipeLines’
TCP
outstanding units for $1.48 billion that it does not completely own. The move comes at a time when the company plans to remove the master limited partnership (MLP) structure of TC PipeLines, a corporate set-up once popular in the U.S. pipeline industry. (
Read More
)
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