Wall Street closes higher as energy, financials lead broad rally

Wall Street closes higher as energy, financials lead broad rally

September 28, 2020

By Stephen Culp

(Reuters) – Wall Street rallied to close sharply higher on Monday as investors sought bargains among sectors hardest-hit by the coronavirus recession, now limping toward its ninth month.

All three major U.S. stock indexes made solid gains on the heels of the longest weekly losing streak in over a year for both the S&P 500 and the Dow.

But energy <.SPNY>, financials <.SPSY>, and industrials <.SPLRCI>, which suffered the most bruising blows from the economic shutdown, enjoyed among the largest percentage gains among major S&P 500 sectors.

“Today’s market is being led by energy and financials, but it’s a very well-balanced market,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. “Every sector is participating in this rally.”

However, even with Monday’s jump, the indexes are only days away from closing the books on their first monthly declines since March, when markets were sent into a freefall by pandemic-related lockdowns.

“Given that it’s been a weak month, some rebalancing may be occurring,” Ghriskey added. “The rebalancing would move allocations to equities and some of that may be happening today.”

The third quarter also draws to a close on Wednesday, and despite September’s expected loss, the S&P and the Nasdaq are on course for their best two-quarter winning streaks since 2009 and 2000, respectively.

Market leaders Apple Inc <AAPL.O> and Amazon.com <AMZN.O> once again gave the biggest boost to the S&P 500 and the Nasdaq.

The lack of a COVID-19 vaccine and an additional fiscal stimulus package from Washington have weighed on the markets in recent sessions.

But U.S. House of Representatives Speaker Nancy Pelosi said in an MSNBC interview that stimulus talks with Treasury Secretary Steven Mnuchin are due to continue on Monday, suggesting a possible progress to end the stalemate.

“I’m not sure there’s any chance of it happening before the end of the year but it’s in the news and giving some traders some confidence,” said Ghriskey.

Unofficially, the Dow Jones Industrial Average <.DJI> rose 414.67 points, or 1.53%, to 27,588.63, the S&P 500 <.SPX> gained 53.78 points, or 1.63%, to 3,352.24 and the Nasdaq Composite <.IXIC> added 204.81 points, or 1.88%, to 11,118.38.

American Airlines Group Inc <AAL.O> announced late Friday that it has secured a $5.5 billion government loan, and might access more. The news sent the commercial carrier’s stock higher.

This also gave a lift to the broader airline sector, which was badly stricken by pandemic-related restrictions and plunging demand.

Boeing <BA.N> extended Friday’s gains after Federal Aviation Administration Chief Steve Dickson said the agency was set to conduct a 737 MAX evaluation flight this week.

Devon Energy Corp <DVN.N> said it would buy peer WPX Energy Inc <WPX.N> for $2.56 billion, boosting their respective shares.

Ride-hailing platform Uber Technologies Inc <UBER.N> rose after a judge ruled the company could resume operations in London.

(Reporting by Stephen Culp; Editing by Cynthia Osterman)