Stocks Rebound On Wall Street After Recent Losses
U.S. stocks ended on a buoyant note on Monday, as bargain hunting after recent sharp losses, and a report showing another acceleration in U.S. manufacturing activity pushed up prices.
Encouraging economic data from China and euro zone also helped outweigh concerns about rising coronavirus cases and fresh lockdown measures as well as uncertainty about the outcome of the presidential election.
The major averages all ended notably higher. The Dow surged up 423.45 points or 1.6 percent to 26,925.05, the S&P 500 moved up 40.28 points or 1.23 percent to settle at 3,310.24 and the Nasdaq firmed up 46.02 points or 0.42 percent to 10,957.61.
Last week, the Dow had plummeted by 6.5 percent, while the Nasdaq plunged 5.5 percent and the S&P 500 tumbled 5.6 percent.
The report from the Institute For Supply Management showed growth in U.S. manufacturing activity accelerated by much more than expected in the month of October.
The ISM said its purchasing managers index climbed to 59.3 in October from 55.4 in September, with a reading above 50 indicating growth in manufacturing activity. Economists had expected the index to inch up to 55.8.
“Manufacturing performed well for the third straight month, with demand, consumption and inputs registering growth indicative of a normal expansion cycle,” said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.
He added, “While certain industry sectors are experiencing difficulties that will continue in the near term, the overall manufacturing community continues to exceed expectations.”
Meanwhile, a separate report from the Commerce Department showed construction spending in the U.S. increased by less than expected in the month of September.
Among the prominent gainers today were shares from the energy sector. These stocks saw some brisk buying after crude oil prices moved higher despite persisting worries about outlook for energy demand.
Chevron (CVX), Honeywell International (HON), Caterpillar (CAT), Boeing (BA), Visa (V), Merck (MRK) and JP Morgan Chase (JPM) gained 2 to 4 percent.
Tesla (TSLA), Mylan (MYL), Netflix (NFLX) and Costco Wholesale (COST) also rose sharply.
On the virus front, Covid-19 cases continue to surge in the United States as the country is set to choose its next president.
81,493 new coronavirus cases were reported in the U.S. on Sunday, according to data from Johns Hopkins University. Health experts have said that the impacts will likely continue to get worse as colder months drive up infections.
“We’re right at the beginning of what looks like exponential growth in a lot of states,” Dr. Scott Gottlieb, former commissioner of the FDA said on CBS’s “Face the Nation” on Sunday. “This is very worrisome as we head into the winter.”
On Friday, the country breached 9 million mark breaking its own record for daily new infections for the second day in a row after reporting 100,233 new cases.
In overseas trading, markets across the Asia-Pacific region moved mostly higher, driven largely by encouraging manufacturing activity data from China.
European markets turned in a solid performance as well, with strong euro area manufacturing activity data aiding sentiment despite fresh lockdown measures in the U.K., Germany, France and Spain.
The major European markets closed sharply higher. The U.K.’s FTSE 100 gained 1.39%, Germany’s DAX surged up 2.01% and France’s CAC 40 moved up 2.11%, while the pan European Stoxx 600 climbed 1.61%.
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