Tech stocks extend Wall St rally on stimulus hopes

(Reuters) – Wall Street’s main indexes rose for a fourth straight session on Monday on optimism that a coronavirus relief package would eventually come around, while investors geared up for the third-quarter corporate earnings season.

FILE PHOTO: A Wall Street sign is pictured outside the New York Stock Exchange in the Manhattan borough of New York City, New York, U.S., October 2, 2020. REUTERS/Carlo Allegri/File Photo

Technology stocks provided the biggest boost to all three main indexes as Apple Inc jumped 5.3% ahead of a special event on Tuesday, which most analysts believe will be used to unveil the new iPhone with 5G capabilities. Inc climbed 5.1% ahead of its annual Prime Day shopping event on Oct. 13 and 14.

The Trump administration on Sunday called on Congress to pass a stripped-down coronavirus relief bill as negotiations on a broader package ran into resistance.

“The market has come to a realization that stimulus is going to be coming … no matter who is the president. It’s probably going to be coming about a month out from now,” said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC.

A recent Reuters/Ipsos poll showed Americans were steadily losing confidence in President Donald Trump’s handling of the COVID-19 pandemic, with his net approval on the issue hitting a record low.

Growing expectations of a Democratic win in next month’s presidential election have also helped Wall Street’s main indexes climb to one-month highs as a victory for Democratic nominee Joe Biden could ease the trade war with China and resulting tariff pressures on the U.S. economy.

The S&P 500 was less than 2% away from surpassing its record closing high from Sept. 2 that would mark a complete recovery from a 9% pullback.

With the Oct. 15 presidential debate officially canceled, Trump plans to travel to key battleground states this week as his doctor declared he was no longer a transmission risk for the novel coronavirus.

Results from big U.S. banks will be in focus this week, with JPMorgan & Co and Citigroup set to report on Tuesday. Bank shares gained 0.6%.

Overall, analysts expect third-quarter earnings for S&P 500 companies to fall 20.7% from a year earlier, smaller than a 30.6% slump in the second quarter.

At 12:32 p.m. ET, the Dow Jones Industrial Average was up 305.52 points, or 1.07%, at 28,892.42, the S&P 500 was up 60.93 points, or 1.75%, at 3,538.06, and the Nasdaq Composite was up 299.29 points, or 2.58%, at 11,879.24.

The consumer discretionary index hit an all-time high and, along with tech and communication services, rose the most among major S&P sectors.

The energy index was the weak spot, as oil prices dropped on easing supply worries. [O/R]

Twitter Inc gained 5% after Deutsche Bank upgraded the social media company’s shares to “buy” on expectations of continued growth in 2021.

Advancing issues outnumbered decliners by a 1.68-to-1 ratio on the NYSE and by a 1.49-to-1 ratio on the Nasdaq.

The S&P index recorded 65 new 52-week highs and no new low, while the Nasdaq recorded 149 new highs and 10 new lows.

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