Stocks break 9-day slump with huge gains

Daily Freeman (Kingston, NY) - - FRONT PAGE -

The U.S. stock mar­ket re­bounded from a nine­day los­ing streak 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 U.S. pres­i­den­tial race a day be­fore the gen­eral elec­tion.

The FBI an­nounced late 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 per­cent, to 18,259.60. The S&P 500 in­dex rose 46.34 points, or 2.2 per­cent, 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 per­cent, to 5,166.17.

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

Clin­ton ap­peared to be hold­ing on to an edge in the fi­nal stretch lead­ing into Tues­day’s gen­eral elec­tion a day af­ter FBI Direc­tor James Comey told law­mak­ers that a re­view of new Clin­ton emails did not change the bureau’s rec­om­men­da­tion that she should not face charges.

Clin­ton’s solid lead be­gan to shrink on Oct. 28 af­ter the FBI ini­tially no­ti­fied Congress that it was go­ing to re­view the emails. As the polls tight­ened, un­cer­tainty over the out­come of the elec­tion rat­tled fi­nan­cial mar­kets, which see Clin­ton as likely to main­tain the sta­tus quo, while Trump’s poli­cies are less clear.

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, or 3.2 per­cent, to $181.48, while Unit­edHealth added $4.22, or 3.1 per­cent, to $141.93.

“This is not a ra­tio­nal mar­ket. This is a re­ac­tion to less un­cer­tainty,” said Phil Blan­cato, CEO of Laden­burg Thal­mann As­set Man­age­ment. “In those kinds of mar­kets, peo­ple are jump­ing into stocks that they think are cheap. And what are the cheap­est right now? Fi­nan­cials and health care.”

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

The VIX, a mea­sure of how much volatil­ity in­vestors ex­pect to see in the mar­ket over the next 30 days, slumped 16.9 per­cent Mon­day af­ter surg­ing 40 per­cent 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 per­cent from 1.78 per­cent late Fri­day. Util­i­ties and phone stocks, two other havens in­vestors seek when they ex­pect tur­moil, lagged the mar­ket.


Trader Mark Puet­zer works on the floor of the New York Stock Ex­change on Mon­day.

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