Stocks traded mostly higher on Monday as investors tried to regain their footing amid steep losses this month. Sentiment was also lifted by a big acquisition in the tech space as well as strong gains by bank shares.
Gains were pared, however, as a few of the market’s largest technology and consumer discretionary stocks rolled over throughout the day.
The Dow Jones Industrial Average rose 67 points as Goldman Sachs and J.P. Morgan Chase outperformed. The S&P 500 gained 0.5 percent, led by strong gains in financials. The Nasdaq Composite fell 0.1 percent.
Amazon and Netflix rolled over throughout the morning hours, capping the stock market’s gains; the stocks are down 4.5 percent and 5.1 percent, respectively.
J.P Morgan Chase and Goldman Sachs climbed about 2 percent each, while Citigroup gained 1.5 percent. The SPDR S&P Bank ETF (KBE) surged 2.5 percent.
Monday’s moves come after a 3 percent drop on the Dow last week, which was capped off by a decline of nearly 300 points on Friday. The S&P 500 and Nasdaq dropped 3.9 percent and 3.8 percent, respectively.
Worries over a possible slowdown in corporate earnings growth, as well as in the global economy, have sent the major indexes down sharply this month. The Dow and S&P 500 are down 6.7 percent and 8.8 percent, respectively, for October. The Nasdaq, meanwhile, has lost 10.9 percent through Friday’s close.
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“It’s likely we see some lows get retested once again, once again we can’t assume a v-bounce as many were calling for back in early October,” said Andrew Thrasher, portfolio manager for The Financial Enhancement Group and founder of Thrasher Analytics, said in a note.
“Typically, v-bottoms show themselves when the market declines on news, as in a single event that rocks the market but that wasn’t the case this time,” Thrasher said. “Instead we saw a slow bleed in market participation that finally broke the dam of selling and sent stocks across the board lower.”
The S&P 500’s decline this month has shaved off $2.141 trillion in market cap, according to data from Howard Silverblatt of S&P Dow Jones Indices. Silverblatt’s data also show Amazon, Microsoft, Nvidia, Facebook and Apple are among the biggest contributors to the decline this month.
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Still, the major U.S. stock indexes rose on the back of sharp gains in European shares. The Stoxx 600 index, which tracks a broad swath of European stocks, rose 1.7 percent. In Germany, the Dax index climbed more than 2 percent.
U.S. stocks also got a boost after IBM agreed to buy Red Hat, an open-source software distributor, for around $34 billion. Red Hat shares surged nearly 50 percent on the deal, while IBM’s stock fell more than 2.5 percent.
“While it will take some time to see the merits of this deal manifest and the impact on enterprise hybrid cloud competitive deployments in the field … we believe the combination of Red Hat and its Linux cloud platform with IBM could represent a formidable cloud behemoth for the coming years,” said Dan Ives, an analyst at Wedbush Securities, in a note to clients.
Source: cnbc.com | Original Link