National Post (National Edition)
Stocks jump as Nasdaq notches best day since April
Oil plunges most in a week on easing supply worries
U.S. stocks climbed to an almost six-week high amid a rally in some of the world's largest technology companies.
The S&P 500 extended gains into a fourth day and the Nasdaq 100 posted its biggest advance since April after surging as much as 4.1 per cent.
Amazon.com Inc. soared ahead of its Prime Day while Apple Inc. jumped as the tech giant — whose price target was raised by RBC Capital Markets — is set to embrace 5G as one of its most significant additions to this year's iPhones. Twitter Inc. rallied on an upgrade at Deutsche Bank, which also boosted its price estimates for other companies that derive their revenue from digital advertising such as Facebook Inc. and Alphabet Inc.
After plunging into a correction last month, the tech-heavy gauge extended its surge from this year's lows to more than 70 per cent. Investors have once again turned back to the companies flush with cash that can thrive if the economic recovery slows down. Prospects for a quick end to the stalemate over a new stimulus faded Monday with members of the House being told not to expect any action this week and many Senate Republicans rejecting the White House proposal for a deal.
“People are going back to the trade that's worked, and that's the growth trade,” said Keith Gangl, a portfolio manager of Gradient Investments. “People are worried about missing out, so they are going right to the tech leaders.”
The Dow Jones Industrial Average rose 0.88 per cent to end at 28,837.52 points, while the S&P 500 gained 1.64 per cent to 3,534.22.
The Nasdaq Composite climbed 2.56 per cent to 11,876.26.
The S&P 500 energy index fell 0.15 per cent as oil prices dropped on easing supply worries.
Canadian markets were closed for the Thanksgiving Day holiday.
Oil dropped the most in more than a week with Gulf of Mexico production starting to resume and Libya reopening its biggest field.
Futures in New York declined 2.9 per cent, falling to its lowest in a week and breaching its 100-day moving average in a sign of further selling pressure ahead. Global benchmark Brent futures settled below both its 100-day and 200day moving averages.
A string of supply disruptions that have supported prices subsided. Royal Dutch Shell Plc, BHP Group and Chevron Corp said they have begun resuming operations at Gulf of Mexico platforms. Earlier, Libya's National Oil Corp. lifted force majeure on the nation's largest field, which will reach its daily capacity of almost 300,000 barrels in 10 days, a person with knowledge of the situation said.
“Delta was mostly priced in last week on the high side,” said Michael Lynch, president of Strategic Energy & Economic Research. “People are taking the profits now that it has moved on.”
Along with supply disruptions easing in the U.S. and Libya, the cancellation of a workers' strike in Norway is returning more output to a market facing anemic demand due to the pandemic. U.K. Prime Minister Boris Johnson will tighten restrictions as infections rise, while Italy and the Netherlands are also considering new measures. Meanwhile, the Organization of Petroleum Exporting Countries and its allies are mulling whether to proceed with a plan to restore more output in January.
“They look at the balances as carefully as anybody else, and they're looking at what the demand picture is,” said Andrew Lebow, senior partner at Commodity Research Group. “It's highly unlikely that they're going to pursue a tapering strategy. If anything, they might talk about having to reduce production, rather than increase production.”
In the latest sign of refiners struggling to cope with lower demand, Italy's Sarroch refinery in Sardinia — one of Europe's biggest and most complex — will effectively operate at the minimum required rate. The move will mostly affect crude grades from Iraq and Libya, as well as Azeri Light and CPC from the Caspian, according to data compiled by Bloomberg using tanker tracking and port agent reports.
Market watchers are also turning their attention to the U.S. election in November, for which analysts are considering various scenarios that could affect oil prices. In the wake of a Democratic sweep of the White House and Congress, a U.S. return to the Iran nuclear agreement could lead to 500,000-barrel-a-day increase of Iranian output by the third quarter of 2021, JPMorgan Chase & Co. analysts said in a report. However, the additional supply would likely be offset by demand and crude prices could rise by as much as 15 per cent on dollar weakness and fiscal stimulus under a “Blue Wave” scenario, the report said.
PEOPLE ARE ... GOING RIGHT TO THE TECH LEADERS.