Day Traders Diary

9/28/20

The major averages rose sharply on Monday as Wall Street built on strong gains from the previous session amid hope for a new deal on U.S. fiscal stimulus and several corporate deals being struck. The Dow Jones Industrial Average closed 410 points higher, or 1.5%, at 27,584. The S&P 500 gained 1.6% to end the day at 3,351 while the Nasdaq Composite climbed 1.9% to 11,117. Both the Dow and S&P 500 had their best session since Sept. 9.

Sentiment on Wall Street got a boost after House Speaker Nancy Pelosi said Sunday a last-minute coronavirus aid deal remains on the table as House Democrats try to forge ahead on a smaller aid package costing about $2.4 trillion. Pelosi also said she and Treasury Secretary Steven Mnuchin are set to talk on Monday. Still, that price tag is well above what Republican leadership has indicated it will support for a new package.

Investors also cheered a slew of corporate deal making activity. Devon Energy and WPX Energy announced they will move forward with a merger of equals, sending their stocks up 11.1% and 16.4%, respectively. Meanwhile, Caesars Entertainment disclosed a cash offer to buy London-based William Hill for 2.9 billion pounds. Shares of the casino operator rose 2%.

Shares of major tech names rose broadly. Facebook and Amazon climbed 0.8% and 2.6%, respectively. Apple was up 2.4%. Alphabet advanced 1.4% and Microsoft closed higher by 0.8%.

Bank stocks also contributed to Monday's gains. JPMorgan Chase, Bank of America, Citigroup, Goldman Sachs and Morgan Stanley all popped more than 2%.

A look underneath the market surface also shows Monday's gains have been broad based. FactSet data showed more than seven New York Stock Exchange-listed names traded higher for every decliner.

Still, major averages are on track to post steep losses for September, a historically weak month for stocks. The Dow and the S&P 500 have fallen nearly 3% and 4.3%, respectively, while the Nasdaq has dropped 5.6%. The declines followed a massive comeback from the coronavirus sell-off that saw the S&P 500 climb more than 50% from its March bottom.

Wall Street was also coming off a sharp rally on Friday, which saw the Dow pop more than 300 points. However, the S&P 500 and Dow were still down for the fourth straight week as the pandemic continues to keep investors on edge. The Nasdaq jumped nearly 2% last week.

U.S. Treasuries were stagnant during today's stock market gains. The 2-yr yield increased one basis point to 0.14%, and the 10-yr yield was unchanged at 0.66%. The U.S. Dollar Index declined 0.4% to 94.27. WTI crude futures rose 0.7%, or $0.29, to $40.54/bbl.