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Stocks Soar as Trump to Leave Hospital, Investors Hope for Stimulus

Stocks Soar as Trump to Leave Hospital, Investors Hope for Stimulus
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Monday, 05 October 2020 04:09 PM

U.S. stocks rose sharply on Monday, recovering from declines in the previous session, as investors viewed more fiscal stimulus as likely and after news President Donald Trump will leave the hospital where he is being treated for COVID-19.

Trump said he felt "really good" and will leave Walter Reed National Military Medical Center at 6:30 p.m. (2230 GMT). Trump has been at the hospital since late Friday.

Shares of Regeneron Pharmaceuticals Inc jumped 7.1% after Trump's physician said he had been treated with Regeneron's experimental antibody treatment for the disease, which has killed more than a million people worldwide and wreaked economic havoc.

White House Chief of Staff Mark Meadows said on Monday there was still potential to reach an agreement with U.S. lawmakers on more coronavirus relief and that Trump was committed to getting the deal done.

"The stimulus deal is still sitting there, and there's still communication going on ... It looks increasingly like something's going to get done," said Jim Paulsen, chief investment strategist at The Leuthold Group in Minneapolis.

Also, "any news that says the president is looking better is sort of news of less volatility, disruptions and unknowns, all of which scare investors," he said.

The Dow Jones Industrial Average rose 465.83 points, or 1.68%, to 28,148.64, the S&P 500 gained 60.16 points, or 1.80%, to 3,408.6 and the Nasdaq Composite added 257.47 points, or 2.32%, to 11,332.49.

Doubts about the scale of further fiscal aid and a slowing economic recovery have weighed on the S&P 500 recently, with the benchmark index in September registering its worst month since the coronavirus-driven crash earlier this year.

Also helping the market on Monday was positive economic data.

After data last week showed an unexpected slowdown in the domestic manufacturing sector in September, figures on Monday showed activity in the broader services industry pulled above levels that prevailed before the COVID-19 pandemic.

Advancing issues outnumbered declining ones on the NYSE by a 3.10-to-1 ratio; on Nasdaq, a 3.04-to-1 ratio favored advancers.

The S&P 500 posted 29 new 52-week highs and no new lows; the Nasdaq Composite recorded 112 new highs and 16 new lows.

Volume on U.S. exchanges was 8.45 billion shares, compared with the 9.79 billion average for the full session over the last 20 trading days.

GLOBAL MARKETS

U.S. stocks closed sharply higher and crude prices surged Monday as renewed optimism surrounding stimulus negotiations and news of Trump's health progress helped calm investor anxiety.

U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin continued talks toward a bipartisan agreement on a new pandemic relief package. That revived hopes for a new round of stimulus more than two months after emergency unemployment benefits expired for millions of Americans.

"This probably is a bit of a relief rally," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. "Two weeks ago there wasn't much hope and now there's a growing consensus that stimulus could pass before the election."

"That seems to be where the market is leaning right now."

Trump's physician, Dr. Sean Conley, announced late in the session that the president has met or exceeded all standard criteria to be discharged following hospitalization for treatment of COVID-19.

"The markets don't like uncertainty and there seems to be more clarity today on the president's health," Carlson added.

Democratic contender Joe Biden opened his widest lead in a month in the U.S. presidential race, according to a Reuters/Ipsos poll released on Sunday.

Positive updates regarding Trump's health and a flurry of dealmaking activity helped European shares close at a two-week high.

The pan-European STOXX 600 index rose 0.81% and MSCI's gauge of stocks across the globe gained 1.64%.

Crude prices surged on waning uncertainties, and were further supported by an escalating oil workers strike in Norway, where six offshore oil and gas fields were shut down.

U.S. crude futures settled at $39.22 per barrel, a 5.86% gain. Brent crude advanced 5.14% to settle at $41.29 per barrel.

The safe-haven dollar dipped and riskier currencies outperformed on mounting stimulus optimism.

The dollar index fell 0.4%, with the euro up 0.58% to $1.1784.

The Japanese yen weakened 0.41% versus the greenback at 105.78 per dollar, while sterling was last trading at $1.2982, up 0.39% on the day.

Risk-on sentiment also pushed longer-term U.S. Treasury yields to five-year highs and the yield curve steepened to its widest since late August.

Benchmark 10-year notes last fell 25/32 in price to yield 0.7751%, from 0.694% late on Friday.

The 30-year bond last fell 76/32 in price to yield 1.5804%, from 1.48% late on Friday.

Gold inched higher as the dollar slipped, despite gains in equities markets.

Spot gold added 0.7% to $1,911.58 an ounce. 

© 2021 Thomson/Reuters. All rights reserved.


   
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U.S. stocks rose sharply on Monday, recovering from declines in the previous session, as investors viewed more fiscal stimulus as likely and after news President Donald Trump will leave the hospital where he is being treated for COVID-19.
wall street, stock market, trump, dow
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2020-09-05
Monday, 05 October 2020 04:09 PM
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