Wall Street kicked off the week with a broad rally Monday, clawing back much of the stock market’s losses from last week.
The S&P 500 rose 1.3%, led by gains in technology, health care and financial stocks. Small company stocks were among the biggest gainers. The rally reversed a big slice of the index’s 2.5% slide last week, when the S&P 500 posted its biggest weekly decline since June. Treasury yields were mostly higher.
The market’s strong start to the week is a reversal after a mostly downward shift in the market this month led by a sell-off in high-flying tech stocks that many analysts said was long overdue.
“We’ve been due for a little bit of a pullback, and we’ve experienced that so far in September,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. “We still have a positive outlook into the end of the year, but we believe market chop will be the norm.”
The S&P 500 gained 42.57 points to 3,383.54. The Dow Jones Industrial Average rose 327.69 points, or 1.2%, to 27,993.33. The Nasdaq, which includes many tech stocks, picked up 203.11 points, or 1.9%, to 11,056.65. Small company stocks climbed more than the rest of the market, sending the Russell 2000 higher. The index rose 39.70 points, or 2.7%, to 1,536.97.
Several big corporate deals helped put investors in a buying mood Monday. Nvidia jumped 5.8% after announcing plans to buy fellow chipmaker Arm Holdings in a deal worth up to $40 billion. Oracle climbed 4.3% after the business software maker beat out Microsoft to become the “trusted technology provider” of TikTok, the popular video-sharing app based in China. And the stock of Immunomedics nearly doubled after the cancer drug specialist agreed to be acquired by Gilead Sciences in a $21 billion deal. Gilead shares rose 2.2%.
AstraZeneca added 0.5% following news over the weekend that clinical trials for the pharmaceutical company’s coronavirus vaccine will resume after being paused due to a reported side-effect in a patient in the U.K. The vaccine is seen as one of the strongest contenders among the dozens of coronavirus vaccines being tested.
The pandemic accelerated the use of online services by businesses and individuals, driving shares of Apple, Amazon, Microsoft, Zoom Video and other tech companies sharply higher through the summer. But concerns that the high-flying tech stocks had soared too high have put investors in a selling mood in September. The S&P 500 is down 3.3% so far this month, while the Nasdaq has pulled back 6.1%.
“We know that momentum is going to slow a little bit, that’s expected,” said Esty Dwek, head of global market strategy at Natixis Investment Managers. “It wasn’t supposed to be, or it was never going to be a straight line without any bumps in the road.”