Closing Stock Market SummaryThe S&P 500 gained 1.5% on Monday, as investors showed optimism in reopening efforts indicated by more states and countries. The Dow Jones Industrial Average (+1.5%) and Nasdaq Composite (+1.1%) also advanced more than 1.0%, while the Russell 2000 outperformed with a 4.0% gain.
At least nine U.S. states had their economies partially reopened as of Monday, according to The New York Times, while other states like New York, Texas, and Ohio announced plans to gradually reopen in the coming weeks. The prospective increase in economic activity, even without a confirmed COVID-19 treatment, had investors piling into previously-neglected cyclical sectors.
For instance, all 11 S&P 500 sectors ended the day higher, but strength was found in the S&P 500 financials (+3.6%) and materials (+2.6%) sectors, the Dow Jones Transportation Average (+2.8%), and the SPDR S&P Retail ETF (XRT 36.36, +1.82, +5.3%). The consumer staples sector (+0.3%) underperformed.
Even the energy sector (+2.1%) showed relative strength despite the 24% plunge in oil prices ($12.97, -4.05, -23.8%) and news of Diamond Offshore (DO), a small-cap company, filing for Chapter 11 bankruptcy protection. The bullish price action in the face of bad news suggested for investors that the sector may have already bottomed.
Likewise, Caterpillar (CAT 115.20, +1.16, +1.0%) overcame an analyst downgrade at Morgan Stanley, and General Motors (GM 22.45, +0.50, +2.3%) overcame a dividend suspension update.
Perhaps most noteworthy about today's action was that the market's most recognizable, and widely-held, mega-cap technology stocks did not participate in the broader advance. Instead, small-caps, as represented by the Russell 2000, welcomed renewed buying interest.
Overseas, Italy, France, Spain initiated steps to reopen their economies, but some attention should also be given to the Bank of Japan. The central bank lifted the cap on its JGB bond purchases, which some attributed to the initial gains in stocks, and said it will be increasing its purchases of corporate bonds and commercial paper.
U.S. Treasuries finally showed some weakness amid the bullish price action in equities. The 2-yr yield increased three basis points to 0.23%, and the 10-yr yield increased six basis points to 0.66%. The U.S. Dollar Index declined 0.3% to 100.07.
Investors did not receive economic data on Monday. Looking ahead to Tuesday, investors will receive the Conference Board's Consumer Confidence Index for April, the S&P Case-Shiller Home Price Index for February, and the Advance March reports for International Trade in Goods, Retail Inventories, and Wholesale Inventories.
- Nasdaq Composite -2.7% YTD
- S&P 500 -10.9% YTD
- Dow Jones Industrial Average -15.4% YTD
- Russell 2000 -23.2% YTD