March 3, 2021

U.S. Market Indexes Up Sharply

Wall Street surged in a broad rally on Monday as a merger between big Greek banks provided rare encouraging news from debt-stricken Europe, while a rebound in American consumer spending calmed fears of a new recession.

At the close, the Standard Poor’s 500-stock index was up 33.28 points, or 2.8 percent, at 1,210.08. The Dow Jones industrial average of 30 blue-chip stocks rose 254.71 points, or 2.26 percent, to 11,539.25. The Nasdaq composite index was up 82.26 points, or 3.32 percent, at 2,562.11.

Since Aug. 8, when the S. P. 500 hit its recent low of 1,119.46, the index has risen about 8 percent.

Since the Dow’s recent low of 10,719.94 on Aug. 10, the average has gained about 7.4 percent and is within about 50 points of where it started the year.

Financial stocks were the greatest gainers on Monday after Alpha Bank and Eurobank EFG sealed a merger that was expected to prompt more deals to shore up a sector battered by the euro zone’s debt crisis and recession.

The banks “need to strengthen their balance sheets, and this would help with that, making the sector less worrisome,” said David Ruff, portfolio manager at the Forward Select EM Dividend Fund in San Francisco.

“We’ll probably need to see greater policy action in the region,” Mr. Ruff said. “But the merger needs to be done, and that’s why we’re seeing a pause in the recent selling pressure.”

The S. P. financial index was up 3.4 percent and the KBW Banks index added 3.6 percent. Bank of America rose 8.12 percent to $8.39 and JP Morgan Chase gained 4 percent to $37.64. New York-listed shares of National Bank of Greece soared 37.7 percent to $1.15.

Insurers also rose as property damage from Hurricane Irene was less than feared, according to early estimates. Travelers rose 5.1 percent to $50.75, while Allstate jumped 7.6 percent to $26.30.

Oil prices were up $1.90, to $87.27 a barrel. They extended gains from Friday, when they rose on the possibility of new stimulus from the Fed. The Fed chairman, Ben S. Bernanke, left the door open for such stimulus in a speech on Friday in Jackson Hole, Wyo.

Mr. Bernanke, in his annual address to central bankers, gave no details on whether the Fed was planning to flood markets with more dollars to help the economy. But he said the central bank’s policy panel would meet for two days next month instead of one to discuss additional monetary stimulus, offering hopes of a move then.

Some analysts say it may be hard for Mr. Bernanke and the Fed to follow through with another round of bond buying after the $600 billion program that expired in June.

“He has a much, much harder decision this time,” Jim Walker, founder of Asianomics, told Reuters television. “What he’s got to do is convince the dissenting voices in the Fed — and there are now three of them — that economic growth is so bad that it is time to use even more extraordinary measures.”

Commodities around the world have had a volatile month, and gold prices fell again on Monday. Gold futures were down $5.70 to $1,788.40. “With a possibility of a stimulus package from the Fed in the weeks ahead, risk appetite seems to have returned to the markets and safe havens are being dumped,” said Pradeep Unni, senior analyst at Richcomm Global Services.

The Treasury’s 10-year note fell 21/32, to 98 25/32. The yield rose to 2.26 percent, from 2.19 percent late Friday.

Consumer spending recorded its largest increase in five months in July, supporting views that the economy was not falling back into recession. While the number of signed contracts for home sales in July fell 1.3 percent, the decline matched forecasts and topped year-ago levels.

“Consumer spending has been focused on the past couple of months, so any kind of strength there is a good thing for the economy and the market,” said Brian Lazorishak, portfolio manager at Chase Investment Counsel in Charlottesville, Va.

The New York Stock Exchange and the Nasdaq opened on schedule, but trading volume was light. Many workers were stuck at home because many commuter rail and bus lines were not operating the day after Hurricane Irene swept the region.

Article source:

Speak Your Mind