U.S. stocks on Monday recorded their largest one-day percentage gains since the summer of 2015, with major indexes recouping nearly half of their losses from last week.
While the rally coincided with the reports that the U.S. and China are conducting behind-the-scenes talks to avert a global trade war, some analysts noted that the bounce was technical, rather than driven by fundamentals or sentiment.
What are the main benchmarks doing?
The Dow Jones Industrial Average DJIA, +2.84% climbed 669.40 points, or 2.8%, to 24,202.60, for its third-best point gain in history. Among the blue-chip companies, all but one closed higher, led by Microsoft Corp MSFT, +7.57% , Intel Corp INTC, +6.32% and Apple Inc. AAPL, +4.75% .
The S&P 500 SPX, +2.72% rallied 70.29 points, or 2.7%, to 2,658.55, recouping all of its Friday losses. The gains were broad-based, with technology and financials leading the rally, up 4% and 3.2% respectively.
The Nasdaq Composite Index COMP, +3.26% advanced 227.88 points to 7,220.54, a rise of 3.3%.
Percentage gains for all three benchmark were the largest since August 2015, according to FactSet, when the market was in the midst of a correction on fears over China’s economic growth.
The day’s gains come after a protracted period of weakness for Wall Street that left the main indexes near their February lows on Friday.
What’s driving markets?
Global trade tensions are expected to remain front and center for investors in what will be a holiday-shortened week, with markets scheduled to close in observance of Good Friday.
But equity traders seemed to welcome reports that China and the U.S. have been holding discussions in a bid to help stave off a trade war.
What are strategists saying?
“Big positive moves in stocks tend to come after biggest down days, and today’s action looks like a technical bounce, just because markets were so weak for days,” said Mike Antonelli, equity sales trader at Robert W. Baird & Co.
“It’s hard to believe that sentiment changed in a matter of days. It is very well possible we have already peaked if you consider January as the last euphoria of this cycle,” Antonelli said.
What is on the economic docket?
The Chicago Fed national activity index for February came in at 0.88, up from 0.02 in January.
What stocks are in focus?
Facebook Inc. FB, +0.42% , which tumbled on news that the Federal Trade Commission was investigating the company’s privacy practices, rebounded by the end of the session to end 0.4% higher.
The stock was still an outlier among tech and internet companies, which were otherwise among the top-performing industry groups of the day. Microsoft Corp. MSFT, +7.57% gained 7.6%, Netflix Inc. NFLX, +6.45% added 6.5%, Apple Inc. AAPL, +4.75% rose 4.8% and Amazon.com Inc. AMZN, +4.03% gained 4%.
Shares of publicly traded gun companies fell Monday, in the first trading session after a massive worldwide rally protesting gun violence. Sturm Ruger & Co. RGR, -0.40% fell 0.4%, while American Outdoor Brands Corp. AOBC, -2.34% the parent of Smith & Wesson, fell 2.3%.
USG Corp. USG, +19.46% rejected an unsolicited buyout bid by Gerb. Knauf AG, saying it “substantially undervalues” the company and is not in the best interest of its shareholders. The stock gained 19%. Earlier, Berkshire Hathway Inc. BRK.A, +3.56% BRK.B, +3.57% offered to sell its 30.8% stake in the building materials group to privately held Gebr. Knauf Verwaltungsgesellschaft KG.
Finish Line Inc. FINL, +31.09% shares surged 31% after JD Sports Fashion PLC JD., -4.67% said it would buy the U.S. retail chain for $13.50 per share in cash, in a deal valued at $558 million.
Intel Corp. INTC, +6.32% rose 6.3% after Raymond James upgraded the stock to market perform, citing an improved supply/demand balance in the semiconductor industry.
General Electric Co. GE, -1.38% fell 1.4% to $12.89, dropping below $13 for the first time since July 2009. The stock was the only one of the 30 Dow components to be lower on the day; GE has shed 57% over the past 12 months.
What are other markets doing?
European equities SXXP, -0.72% ended with losses, closing near one-year lows, as the euro surged against the dollar. Asian markets finished mixed, as losses eased toward the close. South Korea’s Kospi Composite Index ended 0.5% higher after news of a U.S. trade agreement.
The ICE U.S. Dollar Index DXY, -0.39% fell 0.4% to 89.057, while gold GCJ8, -0.18% settled 0.4% higher at $1,355 an ounce. The precious metal rose for a fourth straight session, marking its highest settlement in just over five weeks.