Wall Street rises but market braced for choppy trade in U.S. election week

In this news, we discuss the Wall Street rises but market braced for choppy trade in U.S. election week.

NEW YORK (Reuters) – The Dow and S&P closed higher on Monday, with the Nasdaq posting thinner gains on the eve of the US presidential election, as investors girded themselves for what could be big swings in the market after all three indexes recorded their biggest weekly decline since March.

Market participants largely expected short-term volatility and the likelihood of major long-term policy changes related to taxes, government spending, trade, and regulation depending on whether Republican President Donald Trump or his Democratic challenger Joe Biden wins the White House race.

Biden leads national opinion polls, but the race is tight in the battlefield states that could tip the election to Trump. Analysts said the outcome most likely to shake up stock markets in the near term would not be an immediate winner on Tuesday night.

While the Dow and S&P were on the positive side, they finished well away from session highs, and the Nasdaq dipped into the red as mega-cap tech and tech-related names struggled. gain ground after falling the week before.

Growth stocks .RLG edged up, but were significantly outperformed by battered value stocks .RLV, which tend to offer better returns coming out of a recession, and recorded their biggest daily percentage gain. for almost a month.

“It’s hard to say if this is a sector rotation bet, an institutional bet today or if more traders are speculating on what might happen tomorrow,” said Peter Giacchi, DMM manager. Floor Trading at Citadel Securities in New York.

“The longer it lasts during the week, if it takes that long, the more volatility we would expect.”

Unofficially, the Dow Jones Industrial Average .DJI rose 402.96 points, or 1.52%, to 26,904.56, the S&P 500 .SPX gained 37.33 points, or 1.14%, to 3,307.29 and the Nasdaq Composite .IXIC added 35.88 points, or 0.33%, to 10.947.47.

Investors betting on a Biden administration, which is expected to provide a massive fiscal stimulus and promote green energy, have fueled a rally in solar stocks, industrials and small caps in recent weeks.

On the other hand, JP Morgan listed Bank of America BAC.N, Wells Fargo WFC.N and Citigroup CN in its “Trump basket” of stocks. The S&P .SPXBK Banks Index added about 2%.

The .SPNY Energy, .SPLRCM Materials and the .SPLRCI Industry recorded the largest percentage gains among the major S&P sectors.

The S&P 500 ended a turbulent week at an almost six-week low on Friday, after quarterly reports of tech mega-caps failed to impress and coronavirus cases rose in the United States and Europe. The weekly percentage drop was the largest since the end of March, which marked the end of a sell-off that sent the benchmark into a bear market, or a drop of more than 20% from a Mountain peak.

The CBOE .VIX volatility index, known as the Wall Street fear gauge, edged down on Monday after hitting nearly four-month highs last week.

Investors will watch the Federal Reserve’s two-day policy meeting this week, the monthly jobs and earnings report of about a quarter of the S&P 500 companies.

Shares of Clorox Co CLX.N surged after reporting its strongest quarterly sales growth in more than two decades and increasing its revenue forecast for the full year.

Market research firm Nielsen Holdings Plc NLSN.N has increased plans to sell its consumer goods data unit for $ 2.7 billion to private equity firm Advent International.

But the S&P .SPCOMAIR airlines index fell as cruise operators Carnival Corp CCL.N and Norwegian Cruise Line Holdings Ltd NCLH.N also lost ground, reflecting fears of a relentless rise in COVID cases. -19.

Reporting by Chuck Mikolajczak; Edited by David Gregorio

Original © Thomson Reuters

Originally posted 2020-11-02 13:36:11.

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