Banking Stocks Help Lead Extended Recovery On Wall Street

(RTTNews) – Following the extreme volatility seen over the past few sessions, stocks showed a strong move to the upside during trading on Monday. The major averages advanced early in the session and managed to remain firmly positive throughout the day.

The major averages held on to their strong gains going into the close. The Dow surged 618.34 points or 2 percent to 31,880.24, the Nasdaq jumped 180.66 points or 1.6 percent to 11,535.27 and the S&P 500 shot up 72.39 points or 1.9 percent to 3,973.75.

The strength on Wall Street came as traders continued to pick up stocks at reduced levels, extending the recovery seen late in the trading session last Friday.

The S&P 500 climbed well off its worst levels to end the day roughly flat after tumbling more than 20 percent from January’s record closing high, which is seen as signaling a bear market.

Buying interest may also have been generated in reaction to news the financial hub of Shanghai has lifted some of its COVID-19 restrictions and U.S. President Joe Biden said he was weighing cutting tariffs on Chinese goods.

“I am considering it. We did not impose any of those tariffs. They were imposed by the last administration and they’re under consideration,” Biden said.

Banking stocks helped to lead the rebound on Wall Street, with the KBW Bank Index spiking by 4.1 percent on the day.

Financial giant JPMorgan Chase (JPM) surged 6.2 percent after ending last Friday’s trading at its lowest closing level in over a year. The rebound comes after JPMorgan said a key performance target may be achieved this year.

Substantial strength was also visible among oil service stocks, as reflected by the 4.8 percent jump by the Philadelphia Oil Service Index. The rally by oil service stocks comes even though the price of crude oil ended the day flat.

Steel stocks also turned in a strong performance on the day, driving the NYSE Arca Steel Index up by 2.6 percent.

Brokerage, telecom and natural gas stocks also saw significant strength, moving higher along with most of the other major sectors.

Among individual stocks, shares of VMWare (VMW) moved sharply higher following reports the cloud computing company is in advanced talks to be acquired by chipmaker Broadcom (AVGO).

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan’s Nikkei 225 Index jumped by 1 percent, while Hong Kong’s Hang Seng Index slumped by 1.2 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the U.K.’s FTSE 100 Index surged by 1.7 percent, the German DAX Index and the French CAC 40 Index shot up by 1.4 percent and 1.2 percent, respectively.

In the bond market, treasuries moved notably lower, giving back ground after trending higher over the past few sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 7.2 basis points to 2.859 percent.

Looking ahead, trading on Tuesday may be impacted by reaction to a report on new home sales as well as remarks by Federal Reserve Chair Jerome Powell.