By Xie Yu, Avantika Chilkoti and Paul Vigna
Stocks rallied Monday as investors cheered early signs that
lockdowns in the U.S. and Europe may be helping slow the
coronavirus pandemic, even as Americans brace for another difficult
week.
Major indexes in the U.S. opened sharply higher and climbed
modestly as the day progressed, with the Dow Jones Industrial
Average up more than 1,200 points. All 30 stocks in the index
climbed, as did all 11 sectors in the S&P 500. Beaten-down
retail and travel stocks were among the biggest gainers.
New York, which has been the hardest hit by the coronavirus in
the U.S., on Sunday reported its first daily decline in deaths,
though Gov. Andrew Cuomo cautioned that it was too early to
understand the significance of that number. Health authorities have
warned that new models show the number of cases is likely to reach
a new high in coming days.
"Everyone is just desperate for good pieces of news," said Peter
Cecchini, chief market strategist at Cantor Fitzgerald. "It doesn't
necessarily reflect anything fundamental. Nothing's changed."
Indeed, with volatility in the market as elevated as it has been
lately, he said, Monday's swings are typical.
The blue-chip index rose 1,204 points, or 5.7%, to 22255,
although it is still down more than 20% this year.
The Dow is on track to move at least 0.5% higher or lower for
the 28th consecutive session, which would mark the longest streak
since October 1931, according to Dow Jones Market Data. That streak
occurred during the Great Depression when the Dow rose or fell at
least 0.5% on 33 consecutive trading days.
The S&P 500 climbed 5.6%, led by the utilities sector, which
rose 8.1%, followed by the materials and consumer-discretionary
groups, both up nearly 7%.
Among the stocks posting some of the biggest gains, Kohl's rose
26%, while Nordstrom climbed 23%. Carnival added 26% and Marriott
International increased 18%. All four stocks are still down more
than 50% for the year.
Whatever path the pandemic takes, the damage on economic growth
is going to be significant, said Fred Cannon, the director of
research at Keefe Bruyette & Woods. He expects a slow recovery,
with growth at the end of 2021 still about 5% below its level from
before the downturn.
As for the market, "I tend to not believe a bottom's been hit,"
he said, "because we don't know what the end point of the economy
is."
At least one-quarter of the U.S. economy has gone idle as
authorities curtailed travel and activity, an analysis conducted
for The Wall Street Journal showed.
JPMorgan Chase Chief Executive James Dimon said in his annual
letter that he expects "a bad recession." The country wasn't
prepared for a pandemic, but "we can and should be more prepared
for what comes next."
The pandemic is resulting in companies adjusting on the fly.
Airlines, for example, are cutting flight schedules, putting
expansion plans on hold and looking for places to park their idle
planes.
United Airlines and American Airlines both have cut travel to
New York as the crisis there worsens; United cut 90% of its traffic
to New York.
Those stocks also rallied Monday. United climbed 6.2%, American
rose 0.8%.
Some investors remain cautious about the prospects of a
sustained market rally. Volatility remains high and cross-asset
correlations -- the typical relationship between the price of
different assets -- has broken down, suggesting the market is still
under stress, according to Dwyfor Evans, head of macro-strategy for
the Asia-Pacific region at State Street Global Markets in Hong
Kong.
"We have good days and bad days. Sometimes they follow each
other," Mr. Evans said.
The yield on 10-year Treasurys rose to 0.671%, up from 0.587%
Friday. The market for U.S. government debt, normally the most
liquid and actively traded bond market in the world, has calmed in
recent weeks following a string of extraordinary measures by the
Federal Reserve. Yields rise when bond prices drop.
Oil markets struggled to find their footing. Major oil-producing
nations are preparing to meet Thursday to discuss how to address
the global glut in supply.
West Texas Intermediate crude, the U.S. oil benchmark, fell 6.5%
to $26.51 a barrel. An emergency summit to discuss global
production cuts was pushed back from Monday to later in the week
amid continued tensions between Saudi Arabia and Russia. Investors
are growing increasingly concerned that a failure to cut output may
result in the world running out of storage space for excess crude.
Limiting production may also not be enough to offset the drop in
demand.
"Even if they sort out something on the supply side, it probably
won't be big enough to offset what's happening on the demand side,"
said Lyn Graham-Taylor, a strategist at Rabobank.
Strict containment measures also showed signs of helping slow
the spread of the virus in parts of Europe, including Italy and
Spain. Both countries are now recording fewer daily deaths than
they have in over a week, and the pressure on hospitals in Italy is
beginning to ease, officials said.
The pan-continental Stoxx Europe 600 index gained 3.7%. In
Asia-Pacific markets, Australia's benchmark S&P/ASX 200 index
closed up 4.3%. Japan's Nikkei 225 rose 4.2%. Markets in mainland
China were closed for a holiday.
Write to Xie Yu at Yu.Xie@wsj.com, Avantika Chilkoti at
Avantika.Chilkoti@wsj.com and Paul Vigna at paul.vigna@wsj.com
(END) Dow Jones Newswires
April 06, 2020 14:37 ET (18:37 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Marriott (NASDAQ:MAR)
Historical Stock Chart
From Aug 2024 to Sep 2024
Marriott (NASDAQ:MAR)
Historical Stock Chart
From Sep 2023 to Sep 2024