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Technology and Financials Lead Rebound Effort
26-Mar-18 16:30 ET
Dow +669.40 at 24202.60, Nasdaq +227.88 at 7220.54, S&P +70.29 at 2658.55

https://www.briefing.com/investor/markets/stock-market-update/2018/3/26/technology-and-financials-lead-rebound-effort.htm

[BRIEFING.COM] Stocks rebounded on Monday, reclaiming around two fifths of last week's decline, with technology and financial shares leading the charge. The S&P 500 advanced 2.7% to 2658.55, the Dow Jones Industrial Average jumped 2.8% to 24202.60, the Nasdaq Composite climbed 3.3% to 7220.54, and the Russell 2000 rose 2.2% to 1543.72.

The market opened on a solidly higher note following a Sunday report from the Wall Street Journal that the U.S. and China have started negotiating to improve American access to Chinese markets -- which helped ease fears of a trade war in the shadow of last week's tariff announcement; President Trump announced last Thursday that the U.S. will impose tariffs of up to $60 billion on Chinese imports, an act that was followed by threats of retaliation from Beijing.

However, the positive energy soon faded following the opening bell and was replaced with a feeling of nervousness, as it looked like the market might roll over; within the first two hours of trading, the S&P 500 trimmed its opening gain of 1.8% to just 0.5%. Luckily for the bulls, the benchmark index reversed course around the 2600 mark and kept climbing through the closing bell. The major averages finished the session at their best marks of the day.

Each of the S&P 500's 11 sectors advanced on Monday, with gains ranging between 0.9% and 4.0%. The top-weighted technology (+4.0%) and financials (+3.2%) sectors provided leadership throughout the session, bouncing back from last week's highly disappointing performances. Within the tech space, Microsoft (MSFT 93.78, +6.60) soared 7.6% after Morgan Stanley raised its target price from $110 to $130 -- a new Street high. Chipmakers also outperformed, evidenced by the 4.2% increase in the PHLX Semiconductor Index, and Apple (AAPL 172.77, +7.83) jumped 4.8%.

Conversely, Facebook (FB 160.06, +0.67) held the tech space's gain in check, rising just 0.4%, after the Federal Trade Commission (FTC) confirmed that it has opened a non-public investigation into the company's privacy practices following the Cambridge Analytica data scandal. The social media giant was down as much as 6.5% on Monday, touching a nine-month low, before bouncing back.

In other corporate news, home improvement retailer Lowe's (LOW 89.30, +5.53) rallied 6.6% after announcing that its CEO, Robert Niblock, will retire after 13 years at the helm, and Finish Line (FINL 13.83, +3.28) spiked 31.1% after agreeing to be acquired by UK-based JD Sports Fashion for $13.50 per share in cash; that represents a premium of 28.0% from Friday's closing price. The total value of the deal is worth approximately $558 million.

The lightly-weighted utilities, consumer staples, telecom services, and real estate groups -- most of which are countercyclical -- were the worst-performing sectors on Monday, but still finished with gains between 0.9% and 1.4%. Meanwhile, the consumer discretionary sector (+2.9%) finished behind technology and financials at the top of the sector standings, led by internet retail giant Amazon (AMZN 1555.86, +60.30), which advanced 4.0%.

In the bond market, U.S. Treasuries ended Monday on a mostly lower note, pushing yields higher across the curve; the yield on the benchmark 10-yr Treasury note ticked up one basis point to 2.84%. The 2-yr yield advanced three basis points to 2.29% following a $30 billion 2-yr note auction that drew a high yield of 2.31% on a bid-to-cover of 2.91.

Investors did not receive any notable economic data on Monday, but will receive two reports -- the S&P Case-Shiller Home Price Index for January (Briefing.com consensus 6.3%) and the Conference Board's Consumer Confidence Index for March (Briefing.com consensus 129.5) -- on Tuesday morning.

Nasdaq Composite: +4.6% YTD
S&P 500: -0.6% YTD
Dow Jones Industrial Average: -2.1% YTD
Russell 2000: +0.5% YTD