Wall Street rebounds as bank and energy stocks surge

Wall Street’s main indexes rose on Monday, with banks and energy shares leading the gains, as investors returned to riskier assets after a sharp selloff last week that was fanned by worries about slowing economic growth.

Nine of the 11 major S&P sectors advanced in early trading. Energy shares jumped 3.4 per cent after losing 7.3 per cent over the past week on fears new COVID-19 curbs would hit fuel demand.

Industrials and banks added 0.7 per cent and 1.2 per cent, respectively.

Pfizer jumped 3.9 per cent after the U.S. Food and Drug Administration gave full approval to the COVID-19 vaccine made by it and German partner BioNTech SE for use in people over the age of 16.

The S&P 500 and Dow slipped from all-time highs last week on worries that a surge in cases of the Delta variant would further hurt the economy at a time when growth was already beginning to slow.

At 10:04 a.m. ET, the Dow Jones Industrial Average was up 232.69 points, or 0.66 per cent, at 35,352.77, the S&P 500 was up 32.79 points, or 0.74 per cent, at 4,474.46.

The Nasdaq Composite was up 142.81 points, or 0.97 per cent, at 14,857.47, with Facebook Inc, Apple Inc, Amazon.com, Google-owner Alphabet Inc and Tesla Inc all up between 0.6 per cent and 2.7 per cent.

The Federal Reserve’s annual economic symposium in Jackson Hole, Wyoming, will now be closely watched for cues on when the central bank would start to taper its massive pandemic-era stimulus.

The summit will be held virtually, on Aug. 27, for a second straight year.

“People are expecting that the accommodative positioning of the Fed will stay in place for at least another handful of months as Delta has given the Fed to do nothing in the short term,” said Thomas Hayes, managing member at Great Hill Capital in New York.

“When you have so much liquidity in the system and there’s not any other place to go with rates so low … investors who have bought these dips have been amply rewarded. So I don’t see that changing until when they announce taper.”

Data showed U.S. business activity growth slowed for a third straight month in August, with IHS Markit’s flash Composite PMI output index, falling to 55.4 – the lowest since last December – from 59.9 in July.

Among other stocks, U.S.-listed shares of Trillium Therapeutics Inc surged 188.4 per cent after Pfizer agreed to buy remaining shares of cancer drug developer it does not already own in a $2.26 billion deal.

General Motors Co fell 2.9 per cent after the largest U.S. automaker said it would take a $1 billion hit to expand the recall of its Chevrolet Bolt electric vehicles due to the risk of fires from the high-voltage battery pack.

Advancing issues outnumbered decliners by a 3.36-to-1 ratio on the NYSE and a 3.61-to-1 ratio on the Nasdaq.

The S&P index recorded 48 new 52-week highs and no new low, while the Nasdaq recorded 65 new highs and 19 new lows.

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