Stock Market News for Sep 29, 2020
Wall Street closed sharply higher on Monday following positive development regarding Congressional negotiations for the approval of a fresh coronavirus-aid package. Moreover, a flurry of merger and acquisition activities also bolstered investors' confidence on risky assets like equities. All the three major stock indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) gained 1.5% or 410.10 points to close at 27,584.06, maintaining 3-day winning streak. Notably, 27 components of the 30-stock index ended in the green while 3 finished in red. The blue-chip index is 3.3% below to become green year to date.
Moreover, the tech-laden Nasdaq Composite finished at 11,117.53, appreciating 1.9% or 203.96 points due to the strong showing by technology behemoths, continuing 3-day winning run.
Meanwhile, the S&P 500 advanced 1.6% to end at 3,351.60, marking third successive day of gains. The Financials Select Sector SPDR (XLF), the Energy Select Sector SPDR (XLE) and the Consumer Discretionary Select Sector SPDR (XLY) climbed 2.4%, 2.4% and 2.1%, respectively. Notably, all eleven sectors of the benchmark index closed in positive zone.
The fear-gauge CBOE Volatility Index (VIX) was down 0.7% to 26.19. A total of 8.74 billion shares were traded on Monday, lower than the last 20-session average of 10.05 billion. Advancers outnumbered decliners on the NYSE by a 5.27-to-1 ratio. On Nasdaq, a 3.25-to-1 ratio favored advancing issues.
Positive Development on Fresh Fiscal Stimulus
On Sep 28, U.S. House of Representatives Speaker Nancy Pelosi unveiled a new $2.2 trillion new coronavirus-aid package on behalf of Democrats. On Sep 27, Pelosi has expressed her hope that deal can be reached with the White House on a new coronavirus relief package and that talks were continuing.
Notably, Pelosi and U.S. Treasury Secretary Steven Mnuchin had telephonic discussion on Sep 27 and 28. Both of them will again discuss on Sep 29. In fact, Nancy Pelosi, Senate Democratic leader Chuck Schumer, Steven Mnuchin and White House Chief of Staff Mark Meadows are trying hard to reach an amicable solutions regarding the size of the aid package.
Meanwhile, the Democrats have reduced the deal size to $2.2 trillion from $3.4 trillion demanded earlier while the Republicans have raised the deal size to $1.5 trillion from $1 trillion offered earlier. The U.S. Congress is yet to reach a solution agreeable to both parties.
Reopening of the negotiation process related to a fresh round of pandemic-relief package resulted in a broad-based rally in Wall Street. In fact, the energy, financials and consumer discretionary gained more than the technology sector. The industrials, real estate and materials sectors also jumped on Sep 28.
Flurry in M&A Activities
Devon Energy Corp. DVN and WPX Energy Inc. WPX have decide to merge in an all-stock deal to create an oil company with an enterprise value of around $12 billion. Moreover, the mining giant Cleveland-Cliffs Inc. CLF has decided to acquire the U.S. operations of ArcelorMittal MT for $1.4 billion. Meanwhile, Ivanti Inc. has decided to takeover MobileIron Inc. MOBL, mobile security platform serving the work-from-home market, in an all-cash deal for a consideration of $872 million.
Furthermore, casino operator Caesars Entertainment Inc. CZR has decided to buy London-based sports betting site, William Hill, for around $3.7 billion in cash. Additionally, the Chinese social-media giant Sina Corp. SINA that it will become a private firm in a $2.59 billion deal.
Cleveland-Cliffs carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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