EconomyEditor's PickNewsWall Street Opens Higher as Rebound Continues; Dow up 335 Points

2 years ago359 min
imageStock Markets2 hours ago (Sep 28, 2020 09:46AM ET)

(C) Reuters.

By Geoffrey Smith — U.S. stock markets started the new week where they left off with the old one, rallying hard on the perception that the September sell-off has gone too far, too fast – albeit with little in the way of fundamental news to support much movement one way or the other over the weekend.

By 9:40 AM ET (1340 GMT), the Dow Jones Industrial Average was up 338 points, or 1.2%, at 27.512 points. The S&P 500 and the NASDAQ Composite were both up 1.3%.

On a quiet day for economic data, attention is sliding more and more to the looming presidential election, which is now less than six weeks way. .The two candidates, Joe Biden and Donald Trump, hold their first debate on Tuesday, Biden having gained a nice attack line over the weekend with the New York Times’s disclosure of Trump’s tax returns. While the disclosure said little of substance that wasn’t already widely known or assumed to be true, it underlined Trump’s chronic lack of business success in any activity other than his career as a TV reality show host.

Andreas Steno Larsen, a strategist with Nordea, noted that the traditional underperformance of equities ahead of the election is to be expected again this year.

“As the uncertainties are even larger than usually this time, the case for equity underperformance ahead of the vote is strong, while a clear result in early November would open the door higher for equities again, Larsen wrote in a note to clients.

The market was supported at the margins by some merger and acquisition activity that fed a narrative that corporates will continue to adapt to the changing circumstances and take advantage of the opportunities created by the market sell-off this year.

Devon Energy (NYSE:DVN) stock rose 3.4% and WPX Energy (NYSE:WPX) stock rose 4.7% after Devon announced an all-share offer for its rival, a move that will enable the two to operate more efficiently without Devon having to spend precious cash.

In the same vein, bank stocks all rose on hopes that the Federal Reserve will not extend its current restrictions on stock buybacks at a meeting later Monday. Morgan Stanley (NYSE:MS) stock rose 2.8%. while JPMorgan (NYSE:JPM) stock rose 1.5% and Goldman Sachs (NYSE:GS) rose 1.9%. Citigroup (NYSE:C) stock, which had fallen nearly 20% over the last month, rose 3.1%.

Meanwhile Caesars Entertainment (NASDAQ:CZR) fell 2.0%, even after it announced a bid for U.K. William Hill (OTC:WIMHY) that, at $3.7 billion, was less than speculated on Friday, when news broke that William Hill had held talks both with Caesars and private equity house Apollo Global Management (NYSE:APO).

ADRs in Diageo (NYSE:DEO), the world’s biggest liquor company, rose over 6% to their highest in nearly three weeks after it noted that sales had improved recently – although it noted that the latest turn for the worse with the pandemic was still a threat to its outlook.

Wall Street Opens Higher as Rebound Continues; Dow up 335 Points

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