Wall Street Rebounds on Monday After Last Week’s Decline

The three top indexes each closed more than 7 percent higher.

Wall-Street-Rebounds-on-Monday-After-Last-Week’s-Decline

During early trading on Monday, the Dow rallied 1,000 points, a stark difference from the sell-off from late last week. Wall Street’s rebound saw the Dow more than 4 percent higher by Monday morning, while the S&P 500 was 4.6 percent higher and the Nasdaq gained 4.5 percent. By the end of the trading day, the Dow stood at 22,679.99 or 7.73 percent higher, while the Nasdaq nearly matched the Dow’s percentage gains at 7.33 percent to close at 7,913.24. The S&P 500 wasn’t too far behind as it closed 7.03 percent higher at 2,663.68.

Some of the winners were American Express, which gained over 10 percent, followed by Dow Inc., JP Morgan Chase, and Raytheon Technologies, which all rose more than 7 percent each.

The financial and industrial sectors led the S&P 500 at more than 5 percent higher. Meanwhile, even retail gained momentum as Kohl’s Nordstrom, and Macy’s stocks rose sharply higher in spite of temporary brick and mortar closures due to the coronavirus.

Last week’s trading saw the third week in declines. The Dow fell 2.7 percent and the S&P 500 slid 2.1 percent lower. The Nasdaq also closed 1.7 percent down and falling stock prices have sent stocks in bear-market territory as the global economy has come to a standstill.

Signs of optimism coming from the White House noting more stability concerning the outbreak and areas of improvement drove investor sentiment. Reports of a possible deal between Saudi Arabia and Russia to slow oil production also fueled Wall Street’s rally. However, oil prices remain down after a meeting between the two forces was postponed. West Texas Intermediate prices fell to $26.90 a barrel, or 5.1 percent, on news of a delayed meeting which was scheduled for Monday. Sources say the meeting should take place on Thursday now.

Model data also suggested that New York’s coronavirus cases may peak earlier and have fewer deaths than anticipated.

Tom Lee, a research analyst at Fundstrat, noted: “With better visibility on the healthcare crisis in the U.S., particularly, on a potential to model a national peak, we believe buyers are now taking control.”

Bill Ackman from Pershing Square Holdings said, “I am beginning to get optimistic. Cases appear to be peaking in NY.”

Overall, the S&P 500 has rebounded from a March 23 low, bouncing back by more than 18 percent. The Dow has also bounced back by more than 20 percent from the same time period.

Though investor confidence may be up now, President Trump warns that the worst is still to come, saying “there will be a lot of death” as the U.S. deals with the worst week or two ahead fighting the coronavirus.

Chaikin Analytics CEO March Chaikin said, “If we are fortunate to see an effective treatment, there will be plenty of capital gains opportunities. For me, capital preservation is more important than capital gains. Use sharp bear market rallies like we saw last week to raise sufficient cash to enable you to withstand further declines without panicking.”

LEAVE A REPLY

Please enter your comment!
Please enter your name here