Tech, bank shares drive Wall Street higher
U.S. stocks jumped on Monday, bouncing back from the longest weekly losing streak in a year for the S&P 500 and the Dow, with technology, banks and travel-related shares leading the advance.
All 11 major S&P 500 sectors rose, with the S&P 500 financials index’s .SPSY 3% jump putting it on track for its best day in two and a half months.
Analysts said the gains could also be attributed to quarter-end rebalancing of investor portfolios as cyclical sectors including financials, industrials .SLPRCI, materials .SPLRCM and energy .SPNY added more than 2% by mid-day trading.
“There is a lack of negative news out there, we are going through a reflex rally,” said Sam Stovall, chief investment strategist at CFRA in New York.
“Traders tend to gravitate toward those groups that are most oversold because they have the greatest upside potential,” he said, referring to banks and travel-related stocks.
Delta Air Lines DAL.N, United Airlines UAL.O and American Airlines Group Inc AAL.O, rose between 5.7% and 6.2%.
Monday’s bounce also put the Nasdaq and the S&P 500 on course for their biggest two-quarter gains since 2000 and 2009, respectively.
Tech-related shares including Alphabet Inc GOOGL.O, Amazon.com Inc AMZN.O, Apple Inc AAPL.O Netflix Inc NFLX.O and Tesla Inc TSLA.O have surged over this period due to their perceived stability at a time of economic uncertainty.
Still, Wall Street’s three main indexes were on track for their first monthly decline since the coronavirus-led crash in March, and analysts expect trading to remain choppy in the run-up to the Nov. 3 presidential election.
“We don’t see this as the beginning of another big leg up. Between now and the election, you’re going to see a lot of turmoil,” John Traynor, chief investment officer at People’s United Advisors, said.
At 12:52 p.m. ET the Dow Jones Industrial Average .DJI was up 543.47 points, or 2.00%, at 27,717.43, the S&P 500 .SPX was up 54.40 points, or 1.65%, at 3,352.86 and the Nasdaq Composite .IXIC was up 144.94 points, or 1.33%, at 11,058.50.
Boeing BA.N shares jumped 7.3% after Federal Aviation Administration Chief Steve Dickson said the agency was set to conduct a 737 MAX evaluation flight this week, a key milestone as the planemaker aims for approval to resume flight.
Devon Energy Corp DVN.N jumped 11.9% after the oil and gas producer said it would buy peer WPX Energy Inc WPX.N for $2.56 billion. WPX Energy shares surged 16.9%.