Stocks close higher in recovery and momentum trade
23-Nov-20 16:10 ET
Dow +327.79 at 29591.21, Nasdaq +25.66 at 11880.55, S&P +20.05 at 3577.59
briefing.com
[BRIEFING.COM] The S&P 500 gained 0.6% on Monday in a recovery trade fueled by momentum and another round of encouraging COVID-19 vaccine/treatment news. The Russell 2000 rose 1.9% to new record highs, and the Dow Jones Industrial Average rose 1.1%. The Nasdaq Composite underperformed with a 0.2% gain.
Briefly, AstraZeneca (AZN 54.70, -0.60, -1.1%) and the University of Oxford said their vaccine has an efficacy rate of up to 90%, and Regeneron Pharma (REGN 523.61, +4.87, +0.9%) said it received emergency use authorization from the FDA for its antibody cocktail. While AZN and REGN shares traded mixed, the value, cyclical, and small-cap stocks took the news in stride.
The S&P 500 energy sector surged another 7.1% to extend its monthly rebound rally to 32.0%, followed by respectable intraday performances from the financials (+1.9%), industrials (+1.6%), and materials (+0.9%) sectors. Advancing issues outpaced declining issues by a 3:1 margin at the NYSE and a 2:1 margin at the Nasdaq.
On the downside, the health care (-0.3%), real estate (-0.3%), information technology (-0.03%), and communication services (-0.02%) sectors held back the benchmark index, which briefly turned negative in the morning. Stay-at-home stocks also underperformed.
Other positive factors today included encouraging preliminary Markit PMI and Services reports for November, the NRF expecting holiday sales to grow between 3.6-5.2%, versus 2019; and TSA data showing the highest number of airline passengers through TSA checkpoints since mid-March on Sunday.
Separately, the market received a temporary boost in the afternoon after The Wall Street Journal reported that Joe Biden will nominate former Fed Chair Janet Yellen as Treasury Secretary. Ms. Yellen has been vocal about the need for more fiscal stimulus, and there are expectations that the Senate would approve her nomination.
U.S. Treasuries finished on a lower note, as the positive news flow aided risk sentiment and helped money flow out of defensive assets. The 2-yr yield increased two basis points to 0.17%, and the 10-yr yield increased three basis points to 0.86%. The U.S. Dollar Index increased 0.2% to 92.54. WTI crude futures 2.2%, or $0.92, to $43.09/bbl.
Looking ahead, investors will receive the Conference Board's Consumer Confidence Index for November, the FHFA Housing Price Index for November, and the S&P Case-Shiller Home Price Index for September on Tuesday.
- Nasdaq Composite +32.4% YTD
- S&P 500 +10.7% YTD
- Russell 2000 +9.0% YTD
- Dow Jones Industrial Average +3.7% YTD
Market Snapshot
| Dow | 29591.21 | +327.79 | (1.12%) | | Nasdaq | 11880.55 | +25.66 | (0.22%) | | SP 500 | 3577.59 | +20.05 | (0.56%) | | 10-yr Note | -2/32 | 0.850 |
|
| | NYSE | Adv 2363 | Dec 723 | Vol 986.8 mln | | Nasdaq | Adv 2346 | Dec 1210 | Vol 5.2 bln |
Industry Watch
| Strong: Energy, Industrials, Financials, Materials |
| | Weak: Health Care, Real Estate, Information Technology, Communication Services |
Moving the Market
-- Another round of positive news on the COVID-19 vaccine/treatment front; momentum trading
-- Small-cap, value, and cyclical stocks outperformed, while mega-caps and stay-at-home stocks underperformed
-- Joe Biden will reportedly nominate former Fed Chair Janet Yellen as Treasury Secretary
|
|
