Bulls Battle Back from Friday’s Drop…..
U.S. equities finished the second-to-last trading day of a bumpy November solidly higher, getting a boost after President Biden indicated that the need for lockdowns in the midst of the new COVID variant found in South Africa was currently off the table. Growth-oriented issues, notably Information Technology and Consumer Discretionary, lead the way, with all sectors posting gains. Crude oil prices rebounded from Friday’s tumble to give Energy stocks a boost, while Financials also participated amid a gain in Treasury yields following late last week’s drop on a rally in Treasury prices. On the economic front, pending home sales jumped and some regional manufacturing activity cooled, but remained expansionary. The U.S. dollar gained ground and gold was modestly lower. In equity news, Twitter Inc. announced that Chief Executive Officer (CEO) Jack Dorsey will step down. European equities finished with widespread gains, while markets in Asia extended Friday’s drop.
The Dow Jones Industrial Average rose 237 points (0.7%) to 35,136, the S&P 500 Index gained 61 points (1.3%) to 4,655, and the Nasdaq Composite rallied 291 points (1.9%) to 15,783. In heavy volume, 4.3 billion shares of NYSE-listed stocks were traded, and 4.7 billion shares changed hands on the Nasdaq. WTI crude oil rose $1.80 to $69.95 per barrel. Elsewhere, the gold spot price lost $3.60 to $1,781.90 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.2% higher at 96.28.
Pending home sales jump, Treasury yields rebound following last week’s drop…..
Pending home sales jumped 7.5% month-over-month (m/m) in October, versus the Bloomberg consensus estimate of a 1.0% gain, following September’s downwardly-revised 2.4% drop. Sales were down 4.7% year-over-year (y/y), on the heels of September’s negatively-adjusted 7.3% fall. Pending home sales reflect contract signings and are a gauge of the pipeline of existing home sales.
The Dallas Fed Manufacturing Index slowed unexpectedly but remained in expansion territory (a reading above zero) for November. The index declined to 11.8 from 14.6 in October and compared to forecasts calling for a rise to 15.0.
Treasuries were lower, paring some of Friday’s rally that came amid flared-up global market uneasiness regarding a new COVID-19 variant, as the yield on the 2-year note was up 1 basis point (bp) at 0.51%, while the yields on the 10-year note and the 30-year bond increased 4 bps to 1.52% and 1.87%, respectively.
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