Monday's early trade: US indexes rebound as focus shifts to White House race

NEW YORK: Wall Street's major indexes bounced back on Monday after their steepest weekly loss since March, as investors geared up for an event-packed week centered around the US presidential election.

Market participants expect short-term trading turmoil and major long-term policy shifts related to taxes, government spending, trade and regulation depending on whether President Donald Trump or his Democratic challenger Joe Biden wins the White House race.

Biden is ahead in national opinion polls, but races are tight in battleground states that could tip the election to Trump. Analysts said the outcome most likely to shake equity markets in the near term would be no immediate winner at all on Tuesday night.

"Traders are trying to position themselves to the idea that just having a result will be good for the market," said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey.

On the other hand, JP Morgan has listed Bank of America, Wells Fargo and Citigroup in its "Trump basket" of stocks. The S&P banks index added 0.6%.

Materials and industrials posted the sharpest percentage gains among major S&P sectors.

The S&P 500 ended a turbulent week at near six-week lows on Friday after quarterly reports from technology mega-caps failed to impress and on surging coronavirus cases in the United States and Europe.

The CBOE volatility index, known as Wall Street's fear gauge, inched lower on Monday after ratcheting up to near four-month highs last week.

Focus this week will also be on the Federal Reserve's two-day policy meeting, the monthly jobs report and earnings from about a quarter of the S&P 500 companies.

At 10:57 a.m. ET the Dow Jones Industrial Average rose 391.78 points, or 1.48% to 26,893.38 and the S&P 500 gained 41.34 points, or 1.26% to 3,311.30. The Nasdaq Composite gained 94.03 points, or 0.86%, to 11,005.62.

Clorox Co gained 5% after reporting its strongest quarterly sales growth in more than two decades and raising its full-year revenue forecast as coronavirus-driven hygiene needs escalated demand for everything from disinfectants to water filters.

Market research firm Nielsen Holdings Plc gained 6.6% on plans to sell its consumer goods data unit for $2.7 billion to private equity firm Advent International.

The S&P airlines index fell 2.2%, while cruise operators Carnival Corp and Norwegian Cruise Line Holdings Ltd shed 4% and 6% respectively, reflecting fears over a relentless surge in Covid-19 cases.

Advancing issues outnumbered declining ones on the NYSE by a 3.8-to-1 ratio. On the Nasdaq, a 2.5-to-1 ratio favored advancers.

The S&P 500 posted five new 52-week highs and two new lows; the Nasdaq Composite recorded 25 new highs and 32 new lows.-Reuters