Hopes of a leveling-off of the COVID-19 pandemic in the U.S. helped fuel a furious rally on Wall Street as stock indexes made sharp gains to start the week, plus more in today’s Closing Bell on Money & Markets.
The Top Story
All three major stock indexes soared more than 7% on the potential that the coronavirus spread could soon plateau.
The S&P 500 recovered around $1 trillion in market value on the massive Monday rally. Despite the bounce, the index remains nearly 20% — or around $6 trillion in market value — short of its all-time high set Feb. 19 before the crash.
The Dow Jones gained 1,627 points. The defensive utilities sector led with big gains, while consumer staples and real estate — considered safe bets during times of market volatility — rose between 3% and 8%.
“All the market cares about right now is the virus and any positive event will see some buyers coming in,” Dennis Dick, proprietary trader at Bright Trading LLC, said. “With New York City numbers getting better on the weekend, people are happy that we may be closer to the top of the peak than we thought.”
Wall Street’s fear gauge fell to its lowest level in two weeks, but analysts cautioned against calling a bottom. During the financial crisis of 2007-08, the S&P 500 took months to establish a bottom, even after the volatility index plummeted.
S&P 500 companies are expected to enter an earnings recession in 2020, with declines in profit in the first and second quarters, according to IBES data from Refinitiv, as demand evaporates across sectors including airlines, luxury goods and industrials.
The Dow Jones rose 7.7%. The S&P 500 jumped 7% while the Nasdaq Composite rose 7.3%.
Stock Market Update: Closing Bell*
S&P 500: 2,663 (+7%)
DOW: 22,679 (+7.7%)
NASDAQ: 7,913 (+7.3%)
GOLD: $1,708.70 (+3.8%)
BITCOIN: $7,228.50 (+7.3%)
U.S. 10-YEAR YIELD: 0.67%
*- as of 4:15 p.m.
A Big Win
This morning, we told you to watch for Slack Technologies Inc. (NYSE: WORK). The workplace messaging company said it was going to have a $600 million debt offering due in 2025. Shares of Slack closed slightly up 0.2%.
Shares of JPMorgan Chase & Co. (NYSE: JPM) jumped 6.4% after CEO Jamie Dimon said the bank is still in a position to lend out more than $150 billion to its customers in his annual letter.
Delta Air Lines Inc. (NYSE: DAL) shares dropped 0.7% on news that Warren Buffett’s Berkshire Hathaway (NYSE: BRK.B) sold off part of its 11% stake in the company.
Golden Nuggets
Safe-haven buyers gained more confidence pushing precious metal prices higher on Monday. Investors seemed more comfortable in metals despite an upturn in equities.
Gold futures moved up 3.8% to trade at $1,708.70 an ounce. Silver futures jumped 5.6% to $15.31 an ounce.
Platinum was up 3.1% to $740 an ounce while palladium moved 0.9% down to $2,087.10 an ounce.
Cannabis Corner
In addition to state-legal marijuana retailers and growers being ineligible for federal relief funds, companies that indirectly service the industry are also not able to receive federal money.
The Small Business Administration said, “businesses engaged in any illegal activity” cannot receive federal money. Because cannabis is illegal federally, that now extends to businesses who derived any of their gross revenues for the previous year from sales to direct marijuana businesses.
Oil Prices Drop 8% on Fears of Production Cut Uncertainty
Despite reports that a deal between Saudi Arabia and Russia to curb oil production was “very close,” oil prices tanked by almost 8% on Monday.
West Texas Intermediate crude futures fell 7.8% to trade at $26.12 a barrel while Brent crude fell 2.9% to $33.12 a barrel.
Despite a rebound from session lows earlier in the day, oil fell back after a meeting between OPEC and its allies, initially scheduled for Monday, was delayed. That prompted investor fears that a deal on cutting production may not be as close as initially believed.
Today’s Big Winners:
Capri Holdings Ltd. (NYSE: CPRI) +25.9%
Ulta Beauty Inc. (Nasdaq: ULTA) +20.4%
Boeing Co. (NYSE: BA) +19.4%
Today’s Big Losers:
Carrier Global Corp. (NYSE: CARR) -7.6%
Gilead Sciences Inc. (Nasdaq: GILD) -0.6%
Biomarin Pharmaceuticals Inc. (Nasdaq: BMRN) -1.7%
Check back for the most important news and numbers each day after the Closing Bell, only on Money & Markets.