Cyclical boost lifts US stocks


  • Markets
  • Tuesday, 24 Nov 2020

The Dow Jones Industrial Average rose 327.79 points, or 1.12%, to 29,591.27, the S&P 500 gained 20.05 points, or 0.56%, to 3,577.59 and the Nasdaq Composite added 25.66 points, or 0.22%, to 11,880.63.

NEW YORK: U.S. stocks closed higher in a choppy session on Monday as hopes for a COVID-19 vaccine lifted economically sensitive sectors such as energy and industrials, but a pullback in megacap shares curbed gains on the S&P 500 and Nasdaq.

Cyclicals led gains, with energy ahead by 7.09% while industrials and financials each rose more than 1%, as data showed monthly business activity expanded at the fastest rate in more than five years.

Energy shares got a boost from another gain in oil prices, which have risen on anticipation a vaccine will help demand recover.

"It's Monday vaccine trade day," said Ken Polcari, managing partner at Kace Capital Advisors in Jupiter, Florida.

"As they move out of those growth names, it's still this continued move into larger cyclical, value names which is why you see the Dow performing so well and the Nasdaq under some pressure."

Declines in technology and tech-related heavyweight names such as Apple Inc and Netflix Inc muted gains as investors rotated out of stocks seen as safe bets following a coronavirus-led crash earlier this year.

Major averages got a late boost after the Wall Street Journal reported U.S. President-elect Joe Biden plans to nominate former Federal Reserve Chair Janet Yellen to be the next Treasury secretary.

"A known commodity in a uncertain situation is a potential boon for the market," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

"The Treasury is probably more important than congress in getting the next stimulus package through. This removes a huge roadblock."

The Dow Jones Industrial Average rose 327.79 points, or 1.12%, to 29,591.27, the S&P 500 gained 20.05 points, or 0.56%, to 3,577.59 and the Nasdaq Composite added 25.66 points, or 0.22%, to 11,880.63.

Evidence of high efficacy rates in experimental COVID-19 vaccines had lifted the S&P 500 to a record high this month and brought the blue-chip Dow close to breaching 30,000 points for the first time, breathing new life into cyclical stocks that were beaten down during the recession.

AstraZeneca Plc on Monday became the latest major drugmaker to say its vaccine could be around 90% effective, while the U.S. health regulator is likely to approve in mid-December the distribution of Pfizer Inc's vaccine.

Volume is expected to be on the lighter side moving closer to the Thanksgiving holiday on Thursday.

Sentiment was dented by new lockdowns to contain a surge in coronavirus infections. Nevada on Sunday tightened curbs on casinos, restaurants and bars, while imposing a broader mandate for face-coverings over the next three weeks.

Hopes of more monetary stimulus were dampened after Treasury Secretary Steven Mnuchin last week pulled the plug on some of the Fed's pandemic emergency lending programs.

Richmond Federal Reserve Bank President Thomas Barkin said on Monday that households could struggle over the next several months without more government aid to provide support until a vaccine becomes widely available.

Tesla Inc shares surged 6.58% to move closer toward hitting $500 billion in market capitalization ahead of its inclusion in the S&P 500 next month.

Advancing issues outnumbered declining ones on the NYSE by a 2.93-to-1 ratio; on Nasdaq, a 1.95-to-1 ratio favored advancers.

The S&P 500 posted 31 new 52-week highs and no new lows; the Nasdaq Composite recorded 177 new highs and 11 new lows.

Volume on U.S. exchanges was 12.10 billion shares, compared with the 10.87 billion average for the full session over the last 20 trading days.

- Reuters

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3

US , stocks , markets , Yelle , coronovirus , vaccine , Dow Jones , S&P , Nasdaq ,

   

Did you find this article insightful?

Yes
No

Next In Business News

Bioalpha signs MoU with Zuellig Pharma for vaccine distribution
Gold eases on doubts over US stimulus passage
Summary of business stories from Jan 18 to 24
PTP posted record throughput of 9.8m TEUs last year
Bintai Kinden teams up with ASX-listed International Equities
Indonesia sees risks to growth on virus, natural disasters
Tencent’s US$232b rally triggers frenzy in shares, options
Indonesia FDI picks up in 4Q but down in 2020 due to virus impact
Ge-Shen subsidiary reports 10 Covid-19 cases among workers
China's Kuaishou aims to raise up to US$5.42b in HK IPO

Stories You'll Enjoy


-->