U.S. stock markets closed higher on Monday reversing some of the losses of the last week. Heightens mergers and acquisition (M&A) activities and positive news for the treatment of COVID-19 boosted investors’ confidence on risky assets like equities. All three major stock indexes ended in the green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 1.2% or 327.69 points to close at 27,993.33. Notably, 27 components of the 30-stock index ended in the green while 3 finished in red. The blue-chip index is 1.9% below to become green year to date.
The S&P 500 advanced 1.3% to end at 3,383.54. The Real Estate Select Sector SPDR (XLRE) and the Technology Select Sector SPDR (XLK) surged 2.5% and 2.1%, respectively. Notably, all eleven sectors of the benchmark index closed in positive territory.
Meanwhile, the tech-laden Nasdaq Composite finished at 11,056.65, surging 1.7% due to the strong showing by technology behemoths and semiconductor manufacturers.
The fear-gauge CBOE Volatility Index (VIX) was down 3.8% to 25.85. A total of 8.72 billion shares were traded on Monday, lower than the last 20-session average of 9.28 billion. Advancers outnumbered decliners on the NYSE by a 4.16-to-1 ratio. On Nasdaq, a 3.67-to-1 ratio favored advancing issues.
M&A Activities Heightens
Shares of NVIDIA Corp. NVDA surged 5.8% after the company has decided to acquire British chip-designer Arm Holdings for more than $40 billion in a cash and stock deal from Japanese conglomerate SoftBank Group Corp.
Shares of biotech firm Immunomedics Inc. IMMU skyrocketed 98% after it entered in a deal to be acquired by Gilead Sciences Inc. GILD for $21 billion. Immunomedics’ major drug is Trodelvy for the treatment of breast cancer.
The stock price of Seattle Genetics Inc. SGEN jumped after the company formed two cancer drug development deals with Merck & Co. Inc. MRK. Notably, Merck will also make a $1 billion equity investment in Seattle Genetics.
Positive News on Coronavirus Treatments
Reuters reported that AstraZeneca PLC AZN and Oxford University have resumed clinical trial in the U.K., for their experimental drug for the potential treatment of COVID-19 that was halted after a reported side effect in a U.K. patient. However, the clinical trial is yet to receive approval from U.S. FDA.
The CEO of Pfizer Inc. PFE said the company will come to know about the efficacy of its experimental COVID-19 vaccine by the end of October. If the vaccine get FDA approval, its distribution will start by the end of this year. Notably, Pfizer is developing this drug in association with German drug maker BioNTech SE BNTX.
Meanwhile, Eli Lilly and Co. LLY and Incyte Corp. INCY reported positive initial data for their jointly developed drug for the treatment of coronavirus when combined with Gilead Sciences’ remdesivir.
Notably, each of above-mentioned ten stocks carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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