Shopping Drives market rally
Wall Street bounced back on Monday as bargain hunters returned in force after last week’s sell-off and expectations of a flurry of holiday cyber-spending drove up shares of retailers.
The S&P 500 and the Dow Jones Industrial Average rose about 1.5 percent, while the Nasdaq advanced more than 2 percent. All three indexes posted their biggest percentage gains in nearly three weeks. On Friday the S&P 500 closed 10.2 percent below its record high, confirming a correction for the second time this year.
An online spending frenzy was expected as retailers tempted customers with a blizzard of discounts and free shipping. Cyber Monday spending is seen reaching an all-time high of $7.8 billion in the United States, according to Adobe analytics.
“What we’re seeing today is a relief rally,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. “It’s Cyber Monday shopping on Wall Street.”
E-commerce bellwether Amazon.com (AMZN.O) rose 5.3 percent, providing the biggest boost to both the Nasdaq and the S&P Retail index .SPXRT, which was up 3.1 percent.
Crude oil prices LCOc1 posted their biggest percentage jump in five months, driven higher by plunging U.S. stockpiles and increasing supply worries. That pushed energy shares up 1.7 percent. Brent crude prices have dropped nearly 30 percent since early October.
Meanwhile, General Motors Inc (GM.N) announced it would cut production, ax low-selling models and slash its North American headcount in the automaker’s biggest restructuring since emerging from bankruptcy a decade ago. The stock ended the session up 4.8 percent.
The Dow Jones Industrial Average .DJI rose 354.29 points, or 1.46 percent, to 24,640.24, the S&P 500 .SPX gained 40.89 points, or 1.55 percent, to 2,673.45 and the Nasdaq Composite.IXIC added 142.87 points, or 2.06 percent, to 7,081.85.
All 11 major sectors of the S&P 500 advanced, with consumer discretionary .SPLRCD and tech .SPLRCT seeing the biggest percentage gains.
The technology sector rose 2.3 percent and provided the biggest boost to the S&P 500, following a slide of more than 6 percent last week, its worst drop in eight months.
Nvidia Corp (NVDA.O) gained 5.6 percent after Credit Suisse initiated coverage of the chipmaker with a bullish outlook.
Zafgen Inc (ZFGN.O) shares plummeted 40.5 percent after the U.S. Food and Drug Administration put a hold on U.S. trials of the company’s experimental diabetes drug, citing safety concerns.
The third-quarter reporting season is largely over, with nearly 97 percent of companies in the S&P 500 having reported, 78 percent of which beat analyst expectations, according to Refinitiv data.