THE S&P 500 registered its biggest daily percentage gain since Nov 24 on Monday after a steep sell-off last week – with technology-related shares led the advance – while a move by retail traders into silver drove up mining shares.
The Dow Jones Industrial Average rose 229.29 points or 0.76% to 30,211.91, the S&P 500 gained 59.62 points or 1.61% to 3,773.86 and the Nasdaq Composite added 332.70 points or 2.55% to 13,403.39.
Investors also watched talks over the latest US COVID-19 relief package.
The iShares Silver Trust ETF – the largest silver-backed ETF – jumped 7.1%. Silver prices climbed to an eight-year peak of just over $30 an ounce before paring gains.
Last week, retail traders drove big gains in companies such as GameStop Corp. The brick and mortar video retailer was down 30.8% on Monday.
The frenzy may have changed course but is likely to stick around for a while, said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.
“The fact of the matter is this is a powerful move in the markets, and it’s not just going to dissipate,” she said.
The S&P 500 technology and consumer discretionary sectors – up more than 2% each – gave the S&P 500 its biggest boosts in the broad market rally.
Amazon.com which is due to report results Tuesday was among the biggest positive influences, along with Microsoft and Apple. Apple has filed for a six-part notes offering, according to an SEC filing.
Results are also expected this week from Alphabet.
US President Joe Biden was to meet with 10 moderate Republican senators to discuss their proposal to shrink his sweeping US$1.9 tril US COVID-19 relief package even as the Democrats prepare to push legislation through Congress without Republican support.
The CBOE volatility index eased from three-month highs.
Last week, Wall Street’s main indexes logged their steepest weekly fall since October as investors digested efficacy data from Johnson & Johnson’s COVID-19 vaccine trial results, and a battle between Wall Street hedge funds and retail investors added to volatility.
Robinhood, the US online broker that has emerged as a gateway for amateur traders challenging Wall Street hedge funds, has held talks with banks about raising US$1 bil in debt so it can continue to fulfill orders for heavily shorted stocks, according to a Reuters report, citing people familiar with the matter.
On the economic front, the latest ISM survey was mixed as US manufacturing activity slowed slightly in January, while a measure of prices paid by factories for raw materials and other inputs jumped to its highest level in nearly 10 years.
Advancing issues outnumbered declining ones on the NYSE by a 3.67-to-1 ratio; on Nasdaq, a 3.44-to-1 ratio favoured advancers.
The S&P 500 posted six new 52-week highs and no new lows; the Nasdaq Composite recorded 100 new highs and 15 new lows.
Volume on US exchanges was 15.92 billion shares, compared with the 15.6 billion average for the full session over the last 20 trading days. – Feb 2, 2021
