Wall Street kicks off week on high note as tech, bank shares gain

(Reuters) – U.S. stocks surged on Monday, bouncing back from the longest weekly losing streak in a year for the S&P 500 and the Dow, with technology, banks and travel shares leading the advance.

Traders wearing masks work, on the first day of in-person trading since the closure during the outbreak of the coronavirus disease (COVID-19) on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 26, 2020. REUTERS/Brendan McDermid/Files

All of the 11 major S&P 500 sectors rose in early trading, while the S&P 500 banks index .SPXBK jumped 2.1% and was on track for its best day in one month.

Travel-related shares including Delta Air Lines DAL.N, United Airlines UAL.O and American Airlines Group Inc AAL.O rose between 2.5% and 3%.

American Airlines Group Inc AAL.O said on Friday that it secured a $5.5 billion Treasury loan and could tap up to $2 billion more in October depending on the allocation of extra funds under a $25 billion loan package for airlines.

“Traders tend to gravitate toward those groups that are most oversold because they have the greatest upside potential,” said Sam Stovall, chief investment strategist at CFRA in New York, referring to banks and travel-related stocks.

Worries over rising coronavirus cases and waning hopes of more fiscal stimulus have led to a spike in market volatility in the past few weeks, and analysts expect trading to remain choppy in the run-up to the Nov. 3 presidential election.

Optimism spilled over from Asian markets after data over the weekend showed profit at China’s industrial firms rose for a fourth straight month in August.

“All of this data reminds investors that we’re not headed for a new bear market or a new recession,” Stovall said.

At 10:00 a.m. ET, the Dow Jones Industrial Average .DJI was up 352.90 points, or 1.30%, at 27,526.86 and the S&P 500 .SPX was up 38.95 points, or 1.18%, at 3,337.41. The Nasdaq Composite .IXIC was up 122.90 points, or 1.13%, at 11,036.46.

Shares of technology-related stocks, which bore the brunt of a selloff earlier this month, were higher, with Facebook Inc FB.O, Alphabet Inc GOOGL.O, Amazon.com Inc AMZN.O, Apple Inc AAPL.O and Netflix Inc NFLX.O all adding about 1%.

Boeing BA.N shares rose 5.0% after Federal Aviation Administration Chief Steve Dickson said the agency was set to conduct a 737 MAX evaluation flight this week, a key milestone as the planemaker aims for approval to resume flight.

Devon Energy Corp DVN.N rose 4.5% after the oil and gas producer said it would buy peer WPX Energy Inc WPX.N for $2.56 billion. WPX Energy shares jumped 7.3%.

Uber Technologies Inc UBER.N rose 3.8% after the ride-hailing firm won a legal bid to restore its London operating licence, which was taken away over safety concerns.

Advancing issues outnumbered decliners by a 7.56-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 3.52-to-1 ratio on the Nasdaq.

The S&P index recorded 3 new 52-week highs and no new lows, while the Nasdaq recorded 31 new highs and 4 new lows.

Reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Arun Koyyur and Anil D’Silva

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