Dow jumps 250 points as Apple leads tech rebound
Stocks rose on Monday as a slew of corporate dealmaking activity and positive news regarding coronavirus vaccine research sparked a broad market rally.
The Dow Jones Industrial Average traded 252 points higher, or 0.9%. The S&P 500 climbed 1.1% and the Nasdaq Composite jumped 1.6%.
Shares of Apple were higher by 2.2%. The market has been following in the footsteps of its rally leader. Apple shares are down 11.9% this month.
Tesla shares rebounded by more than 8%. The once-surging stock is down more than 18% in September after it failed to gain entry into the benchmark S&P 500, something investors were anticipating.
Tech sentiment was lifted by news of Nvidia buying chipmaker Arm Holdings from SoftBank for $40 billion. Nvidia will finance the deal through a combination of cash and common stock. Nvidia was up 5%. Other chipmakers also gained, including AMD, Micron and Skyworks.
Meanwhile, ByteDance rejected Microsoft’s bid to buy TikTok’s U.S. operations. Instead, ByteDance has chosen Oracle to be TikTok’s U.S. technology partner, and Oracle will take a significant stake in the business. Oracle shares were up 5.3%.
Outside of tech, Gilead said it will acquire Immunomedics to expand its cancer treatments for $21 billion. Immunomedics shares doubled. The iShares Nasdaq Biotechnology ETF was up more than 5%.
Sentiment was also boosted by signs of progress toward a coronavirus vaccine. AstraZeneca resumed phase three trials for its coronavirus vaccine in the U.K. following a halt due to safety concerns. However, its trials in the U.S. remains on hold as American regulators investigate the side effects flagged in the U.K. study, Reuters reported Monday.
Meanwhile, Pfizer‘s CEO Albert Bourla said on Sunday that a coronavirus vaccine could be distributed in the U.S. before the year-end.
“Part of this move is from renewed hope for a vaccine,” said Peter Cardillo, chief market economist at Spartan Capital Securities. “That’s giving the market a ray of hope.”
“September has thus far lived up to its reputation, but I think that’s reversing again,” Cardillo said.
All 11 S&P 500 sectors were higher on Monday. Real estate, health care and tech led the way as they rose more than 1.5% each. Overall, eight of the 11 sectors were up more than 1%.
The S&P 500 fell by 2.5% last week, marking the broader-market index’s worst one-week drop since June 26. That decline also marked the first time since May that the S&P 500 closed lower for two straight weeks. The benchmark is down 4.6% this month.
Those losses were driven in large part by a steep drop in tech, the best-performing market sector year to date. The S&P 500 tech sector plunged more than 4% for its biggest weekly loss since March.
The tech-heavy Nasdaq Composite was hit the hardest last week, down 4%. That was its worst week since March.
“The excessive technology froth from August has been wiped away, but in its wake, clear and ominous topping patterns … developed,” said Frank Cappelleri, executive director at Instinet, in a note.
—CNBC’s Yun Li, Julia Boorstin and Jordan Novet contributed to this report.
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