Hi Everyone,
The stock market closed the session significantly higher, with the Dow leading the strong afternoon rally on Wall Street. The Dow was up 448, or 1.7%, to 27,559, the Nasdaq gained 111, or 1.1%, to 9,925, while the S&P 500 rose by 38, or 1.2%, to 3,232. Advancing issues outnumbered decliners by a 4-to-1 ratio on the NYSE, where volume was moderately heavy.
Traders said that stocks had yet another impressive day, finishing near their intraday highs in the face of the weakness in global risk assets. As one trader explained, “U.S. stocks continued the charge to new recovery highs, and while weak European economic releases could have triggered a pullback following last week’s broad rally, bulls were out in full force again this afternoon.”
While the narrow Nasdaq 100 index already hit a new closing all-time high last week, the broader Nasdaq Composite “only” followed suit today. Still, the tech benchmark is well ahead of its U.S. and overseas peers, from a technical perspective, although the Dow and the S&P 500 both have been catching up to Nasday in the past two weeks. The key cyclical sectors propelled the two lagging indices higher today, but while the Nasdaq is eyeing its next major historic technical milestone, the 10,000 level, the Dow and S&P 500 still have some room to cover to reach their prior highs.
The Fed announced a few small but crucial changes to its Main Street lending program, which will be the key vehicle to help small- and medium-sized businesses weather the COVID crisis. The Central Bank lowered the minimum loan size to $200,000, while also increasing the maximum size to $3 million, which likely contributed to the relative strength of small-caps today. The Russell 2000 outperformed even the Dow today, gaining almost 2%, and while the index is still 10% below its all-time high, the past three weeks were nothing short of spectacular for small-caps.
The OPEC and its allies agreed to extend their historic crude oil supply cuts by one month over the weekend, but the price of “black gold” still took a nosedive today. Several analysts expected a more significant commitment from the cartel, but despite the small disappointment, the U.S. energy sector had a great session. The popular XLE ETF surged higher by 4.5% today, adding to last week’s double-digit gains in the sector. And since the U.S. economic outlook continues to improve, cyclical issues could continue to spearhead the broad rally.
As always, have a great evening and stay tuned!!!
Joe
