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Stocks rise and Treasuries fall in risk-on day
05-Oct-20 16:15 ET
Dow +465.83 at 28138.64, Nasdaq +257.47 at 11332.41, S&P +60.18 at 3408.60

https://www.briefing.com/stock-market-update

[BRIEFING.COM] The S&P 500 rose 1.8% on Monday in a risk-on trade, as investors received positive news on President Trump's health, stimulus talks, and economic data. The Dow Jones Industrial Average (+1.7%) kept pace with the benchmark index, but the advantage today belonged to the Nasdaq Composite (+2.3%) and Russell 2000 (+2.8%).

Briefly, President Trump said he would leave the hospital tonight after responding well to several coronavirus treatments, including one from Regeneron (REGN 605.08, +40.28, +7.1%); House Speaker Pelosi and Treasury Secretary Mnuchin reportedly made progress on relief talks; and the ISM Non-Manufacturing Index for September increased to 57.8% (Briefing.com consensus 55.6%) from 56.9% in August.

The news cycle fueled a growth mindset that lifted all 11 S&P 500 sectors into positive territory, boosted small-cap stocks, buoyed crude prices ($39.29/bbl, +2.24, +6.1%) by 6%, and steepened the U.S. Treasury yield curve amid selling in longer-dated maturities.

The energy (+2.9%), information technology (+2.3%), and health care (+2.1%) sectors claimed today's leadership positions with gains over 2.0%. The real estate sector underperformed with a 0.6% gain, but the rate-sensitive space had traded lower for most of the session amid the higher Treasury yields.

The 2-yr yield increased one basis point to 0.14%, while the 10-yr yield rose six basis points to 0.76% -- its highest closing level since June. The U.S. Dollar Index fell 0.4% to 93.46.

Another positive factor for trading sentiment was the S&P 500 clearing its 50-day moving average (3365) at the open and never looking back the rest of the session. The benchmark index also topped the 3400 level for the first time since mid-September.

In corporate news, Bristol Myers Squibb (BMY 59.20, +0.48, +0.8%) agreed to acquire MyoKardia (MYOK 220.34, +80.74, +57.8%) for approximately $13 billion, or $225.00/share, in cash.

Reviewing Monday's economic data:

The ISM Non-Manufacturing Index for September increased to 57.8% (Briefing.com consensus 55.6%) from 56.9% in August. Notably, the September index eclipsed the 57.3% reading registered in February.
The key takeaway from the report is that it had all the right undertones to promote recovery views: new orders increased, the backlog of orders decreased, supplier deliveries slowed, prices were up, albeit at a slower pace, and employment levels grew following six months of contraction.
The Markit Services PMI for September increased to 54.6 from 55.0 in August.

Looking ahead, investors will receive the Trade Balance report for August and the JOLTS - Job Openings report for August on Tuesday.

Nasdaq Composite +26.3% YTD
S&P 500 +5.5% YTD
Dow Jones Industrial Average -1.4% YTD
Russell 2000 -5.2% YTD

Market Snapshot
Dow 28138.64 +465.83 (1.68%)
Nasdaq 11332.41 +257.47 (2.32%)
SP 500 3408.60 +60.18 (1.80%)
10-yr Note -29/32 0.771
NYSE Adv 2255 Dec 763 Vol 849.2 mln
Nasdaq Adv 2584 Dec 889 Vol 3.5 bln

Industry Watch
Strong: Energy, Information Technology, Health Care, Materials
Weak: Real Estate

Moving the Market

-- Risk-on day following positive news on President Trump's health, stimulus talks, economic data

-- Strength in the energy, technology, and health care sectors

-- WTI crude futures rebound 6%, Treasury curve steepens due to selling on longer-end of curve

WTI crude futures rebound 6%
05-Oct-20 15:25 ET
Dow +450.93 at 28123.74, Nasdaq +240.98 at 11315.92, S&P +57.82 at 3406.24

[BRIEFING.COM] The S&P 500 is trading at fresh session highs with a 1.7% gain and above the 3400 level.

One last look at the S&P 500 sectors shows all 11 groups trading higher, with real estate (+0.4%) emerging into positive territory this afternoon. The energy (+2.4%), materials (+2.2%), information technology (+2.1%), and health care (+2.1%) sectors are up more than 2.0%.

Energy stocks are drawing additional support from the sharp increase in oil prices. WTI crude futures settled sharply higher by 6.1%, or $2.24, to $39.29/bbl.