Wall Street showed continued momentum following news from Moderna that its vaccine is 94.5% effective based on early results — and more in Monday’s stock market update.
The strength helped lift the Dow and the Russell 2000 to fresh all-time highs while stay-at-home Tech stocks continued their recent pullback.
Moderna Inc. (Nasdaq: MRNA) shares closed higher by 9.6% but the logistical challenge of manufacturing and distribution remains unknown, which could again make for choppy trading going forward. Meanwhile, volatility failed to make a fresh monthly low but fell for the fourth time in five sessions.
The Russell 2000 gained 2.4% while closing on its record high of 1,785.
The Dow rose 1.6% after tapping a late-day and all-time peak of 29,964.
The S&P 500 rallied 1.2% following the afternoon trip to 3,628.
The Nasdaq was up 0.8% after testing an intraday high of 11,937.
Energy was the strongest sector for the second straight session after zooming 6.6% while Industrials and Materials advanced 2.4% and 2%, respectively. Healthcare was the only sector laggard after slipping 0.2%.
Shares of HD Supply Holdings Inc. (Nasdaq: HDS) gained over 24% after Home Depot Inc. (NYSE: HD) announced an agreement to acquire the company. HD Supply is a national distributor of maintenance, repair and operations products that was previously spun off and sold over a decade ago by Home Depot.
Home Depot set a cash tender offer to purchase all outstanding shares of HD Supply common stock for $56, for a total value of approximately $8 billion.
Walmart Inc. (NYSE: WMT) is scheduled to announce quarterly results ahead of Tuesday’s opening bell. The company is expected to report a profit of $1.18 a share on revenue of $132.2 billion. The high estimate is pegged at $1.26 a share with the low at $1.06, which could produce a headline beat of 8 cents a share or a miss of 12 cents.
In May, Walmart withdrew guidance for fiscal year 2021, citing unprecedented variability in the macro environment brought on by the coronavirus. In August, Walmart declined to provide guidance again for FY21 due to continued uncertainty, but said back-to-school sales were negatively impacted by COVID-19.
As far as specific coverage, a Jefferies analyst raised the firm’s price target on Walmart to $170 from $165 while keeping a Buy rating on the stock. The analyst expects the company will deliver solid Q3 results based on improving comps and a same-store sales growth estimate of 4.5%, which is above the 3.8% consensus growth forecast.
European markets settled higher after European Central Bank Vice President Luis de Guindos asked Eurozone banks to keep using their capital buffers to absorb losses without holding back credit to the real economy.
The Belgium20 and France’s CAC 40 soared 1.7% while UK’s FTSE 100 rose 1.6%. The Stoxx 600 jumped 1.2% and Germany’s DAX 30 climbed 0.5%.
Asian markets closed higher following upbeat news from China and Japan over their economic recoveries.
Japan’s Nikkei surged 2.1% and South Korea’s Kospi rallied 2%. Australia’s S&P/ASX 200 advanced 1.2% and China’s Shanghai was up 1.1%. Hong Kong’s Hang Seng added 0.9%.
China Industrial output climbed 6.9% in October from a year earlier. That was in line with September’s gain and above expectations for a 6.5% rise.
China retail sales rose 4.3% on the year, missing forecasts for 4.9% growth but faster than the 3.3% increase in September.
Japan’s economy expanded by 5% in Q3 of 2020 versus expectations for a rise of 4.4%.
The iShares 20+ Year Treasury Bond ETF (Nasdaq: TLT) fell for the second straight session with the intraday low hitting $157.61. Current and upper support at $158-$157.50 failed to hold. A close below the latter would signal additional weakness towards $156.50-$156.
Resistance is at $158.50-$159 followed by $159.50-$160.
The iPath S&P Vix Short-Term Futures (NYSEArca: VIX) was down for the second straight session after testing a late-afternoon low of 22.43. Current and upper support at 23-22.50 was breached and held. A close below the latter would suggest further weakness towards 22-21.50 and levels from late August.
Lowered resistance is at 24-24.50 followed by 25.50-26.
The Invesco QQQ Trust (Nasdaq: QQQ) has risen two straight sessions after trading to a morning peak of $293.51. Near-term and lower resistance at $293.50-$294 was cleared but held. A close above the latter would indicate a retest towards $295-$295.50.
Support is at $290-$289.50 followed by $288-$287.50.
RSI (relative strength indicator) is in an uptrend after clearing and holding lower resistance at 55-60. A close above the latter would signal additional strength towards 65-70 and levels from mid-August. Key support is at 50.
The Industrials Select Sector SPDR Fund (NYSE: XLI) was up for the second straight session with the intraday and all-time high tapping $87.99. Current and lower resistance at $87.50-$88 was cleared and held. A close above the latter would be a bullish signal for breakout potential towards $89.50-$90.
Support is at $87-$86.50 followed by $85.50-$85.
RSI is in a slight uptrend with resistance at 70 holding. Continued closes above this level would suggest ongoing strength towards 75 and the early August top. Support is at 65-60.
Check back after the closing bell each day for the most important news and numbers in the WealthPress stock market update.