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Stocks shake off nine-day losing streak

Published 07/11/2016

Financial stocks led the market rally
Financial stocks led the market rally

The US stock market rebounded from a nine-day losing streak on Monday, posting its biggest gain in eight months and driving the Dow Jones industrial average up more than 370 points.

Financial stocks led the broad market rally, which erased more than half of the losses racked up by the Standard & Poor's 500 index since October 25.

The gains came as investors mostly focused on the latest developments in the US presidential race a day before the general election.

The FBI announced late on Sunday that its review of newly discovered Hillary Clinton emails found no evidence warranting charges. That appeared to ease the market's anxiety, which ratcheted up in recent weeks over signs that the presidential race was tightening, triggering the longest losing streak for the S&P 500 since 1980.

"Clearly, the market is more comfortable with a Clinton win, only because they feel like they know her policies a little bit better," said JJ Kinahan, chief strategist at TD Ameritrade. "With (Donald) Trump, it's a little bit more of a guessing game, perhaps, as to what his policies will be."

The Dow gained 371.32 points, or 2.1%, to 18,259.60. The average was briefly up as much as 375 points. The S&P 500 index rose 46.34 points, or 2.2%, to 2,131.52. Heading into Monday, the index had been down 66 points over the previous nine trading days. The Nasdaq composite index added 119.80 points, or 2.4%, to 5,166.17.

The major stock indexes were headed higher from the off on Monday, moving sharply in premarket trading overnight as investors sized up the latest development in the US presidential race. The news also helped lift the key stock indexes in Europe.

Banks and health care companies rose more than the rest of the market. Goldman Sachs and UnitedHealth Group had some of the biggest gains in the Dow. Goldman climbed 5.56 dollars, or 3.2%, to 181.48 dollars, while UnitedHealth added 4.22 dollars, or 3.1%, to 141.93 dollars.

Several pharmaceutical companies were also among Monday's biggest gainers. Regeneron Pharmaceuticals gained 24 dollars, or 7%, to 365.39 dollars, while Biogen climbed 18.62 dollars, or 6.7%, to 295.62 dollars.

The VIX, a measure of how much volatility investors expect to see in the market over the next 30 days, slumped 16.9% on Monday after surging 40% last week to its highest level since June, when Britain voted to leave the European Union.

The slide in the VIX reflected less anxiety among investors. Safe haven investments also slumped as investors felt comfortable taking on more risk. Bond prices fell, driving the yield on the 10-year Treasury note up to 1.83% from 1.78% late on Friday. Utilities and phone stocks, two other havens investors seek when they expect turmoil, lagged the market.

Gold and silver also fell. The price of gold slid 25.10 dollars, or 1.9%, to 1,279.40 dollars an ounce, while silver lost 22 cents, or 1.2%, to 18.15 dollars an ounce. Copper bucked the trend, rising 5 cents, or 2%, to 2.31 dollars a pound.

In Europe, Germany's DAX and France's CAC 40 gained 1.9%. Britain's FTSE added 1.7%. Earlier in Asia, Japan's Nikkei 225 finished 1.6% higher, while South Korea's Kospi gained 0.8%. The Hang Seng index in Hong Kong added 0.7%.

The dollar mostly strengthened against other currencies. It rose to 104.58 yen from 103.13 on Friday, while the euro slipped to 1.1040 dollars from 1.1117 dollars. The dollar slid 1.8 percent to 18.68 Mexican pesos from 19.03 pesos.

The Mexican currency has become an indirect proxy among investors for Mr Trump's chances to win the White House. Investors expect that a Trump administration would be negative for the Mexican economy, and would cause the Mexican peso's value to fall as a result.

US benchmark crude oil rose 82 cents, or 1.9%, to close at 44.89 dollars a barrel in New York. The price of oil is coming off a six-day losing streak. Brent crude, which is used to price international oils, gained 57 cents, or 1.3%, at 46.15 dollars a barrel in London.

Other energy futures were mixed. Wholesale gasoline slipped a penny to 1.37 dollars a gallon, while heating oil added a penny to 1.44 dollars a gallon. Natural gas rose 5 cents to 2.82 dollars per 1,000 cubic feet.

AP

Press Association

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