U.S. Stocks Recover From Initial Drop To Close Firmly Positive
Stocks recovered from an initial drop and moved mostly higher over the course of the trading session on Monday. With the turnaround on the day, the Nasdaq and the S&P 500 ended the session at new record closing highs.
The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow climbed 174.31 points or 0.6 percent to 29,276.82, the Nasdaq jumped 107.88 points or 1.1 percent to 9,628.39 and the S&P 500 advanced 24.38 points or 0.7 percent to 3,352.09.
The strength that emerged on Wall Street came as traders returned to ignoring concerns about the economic impact of the deadly coronavirus outbreak.
The Chinese government revealed Sunday night that a total of 40,171 cases of coronavirus have been confirmed, with 908 people dying from the disease.
World Health Organization Director-General Tedros Adhanom Ghebreyesus also voiced concerns about the virus being spread from people with no travel history to China, saying, “We may only be seeing the tip of the iceberg.”
Nonetheless, traders seemed reassured by Chinese President Xi Jinping’s pledge to win the fight against the coronavirus outbreak.
Jinping said in remarks on state television that China will speed up the development of drugs aimed at treating the deadly pneumonia-like virus.
Meanwhile, some traders stuck to the sidelines ahead of the release of closely watched reports on consumer prices, retail sales and industrial production later this week.
Federal Reserve Chairman Jerome Powell is also due to head up to Capitol Hill in the coming days for his semi-annual testimony to Congress.
Powell is slated to testify before the House Financial Services Committee on Tuesday and the Senate Banking committee on Wednesday.
Software stocks showed a substantial move to the upside over the course of the session, driving the Dow Jones U.S. Software Index up by 2 percent to a new record closing high.
Significant strength was also visible among tobacco stocks, as reflected by the 2.2 percent jump by the NYSE Arca Tobacco Index. The index rebounded after ending the previous session at a nearly four-month closing low.
Semiconductor, gold, and biotechnology stocks also saw considerable strength on the day, while a decrease by the price of crude oil weighed on energy stocks.
Crude for March delivery slid $0.75 to $49.57 a barrel, the lowest closing level for a front-month contract since early January 2019.
Reflecting the weakness in the energy sector, the NYSE Arca Natural Gas Index and the Philadelphia Oil Service Index tumbled by 1.8 percent.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan’s Nikkei 225 Index and Hong Kong’s Hang Seng Index both ended the day down by 0.6 percent.
The major European markets also moved to the downside on the day. While the U.K.’s FTSE 100 Index fell by 0.3 percent, the French CAC 40 Index and the German DAX Index both dipped by 0.2 percent.
In the bond market, treasuries extended the notable upward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.1 basis points to 1.547 percent.
Traders are likely to keep an eye on Powell’s congressional testimony on Tuesday, paying close attention to any references to the impact of the coronavirus outbreak.
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