Wall Street claws back some of its losses

Stocks notched solid gains Monday as Wall Street clawed back some of its sharp and sudden September losses.

The S&P500 rose 1.6 percent, its third straight gain. The benchmark index was coming off its first four-week losing streak in more than a year and is on track to close out September with a loss of 4.2 percent after five months of gains.

The market’s gains were widespread, with more than 90 percent of the stocks in the S&P 500 higher. Big Tech stocks, which have been getting the most criticism for getting too expensive following their strong pandemic run, did the heaviest lifting. Several companies announced big mergers andacquisitions, which helped to push markets higher.

Optimism that Congress will reach a deal on another coronavirus relief bill also helped put investors in a buying mood, said Nela Richardson, investment strategist at Edward Jones.

“There’s real concern about a second wave of infections, concern that we’re just riding the coattails of growth that happened after the economy opened up in May,” Richardson said. “Anything that looks like new lifeblood for the economy is read as a positive stimulus.”

One of the big worries hurting stocks this month has been fears that the market climbed too high and got too expensive through its 60 percent rally from late March into early September.

Several factors have been behind the S&P 500’s abrupt drop this month, which halted a remarkable return to record heights for Wall Street even as the pandemic continued to rage.

Many of those factors are still in place, which means analysts along Wall Street say the tumultuous trading may not be over.

“We’re not out of the woods yet,” Richardson said. “Investors should expect volatility, especially as we get closer to the election.”

Investors are still waiting for Congress to deliver another round of support for the economy after extra unemployment benefits for workers and other stimulus expired. Tensions are still rising between the United States and China. And the upcoming U.S. presidential election still means plenty of uncertainty for investors, from what it could do to corporate tax rates to how long markets will need to wait until after Election Day to discover the winner.

The latest monthly employment report fromthe government on Friday could help shed some more light on the economic recovery, but it could also mean more volatility for the markets, said Brad McMillan, chief investment officer for Commonwealth Financial Network.

“This week’s going to be all about the jobs numbers, that’s the elephant in the room,” he said.