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By Alex Eule
| Friday, October 1 Some
Relief. It took a few days,
but stocks finally had their rebound. The S&P
500 rose
1.1%, while the Dow Jones
Industrial Average jumped 483 points, or 1.4%. After a rough
week, investors got some good news: a government shutdown was averted last
night, and there's new hope in the battle against Covid-19, with a promising
antiviral pill from Merck potentially cutting hospitalizations by 50%.
Meanwhile, a closely watched signal of manufacturing activity was up more
than expected, suggesting an economic rebound remains in
place despite the Delta variant and the persistence of Covid. The Merck
news set off a rush to reopening-type stocks, similar to what we saw in the
early days of the vaccine euphoria. Hotels, cruise lines, and casino stocks
jumped, while stay-at-home plays like Peloton
Interactive, Shopify, Chewy, and Etsy were all in negative territory. Merck itself
was up 8.4% on the day. Covid vaccine maker Moderna fell
11%, with investors betting that new treatments could lessen demand for vaccines. For
investors, Monday could bring renewed uncertainty. Democrats in Congress
continue to work on a deal for up to $4.5 trillion in spending. At one
point, a vote on the $1 trillion infrastructure bill was expected today, but
late in the day President Joe Biden asked his party to hold off
on that vote until a deal was struck on his larger $3.5 trillion
social spending package. That's likely to stretch the debate over fiscal
policy into next week, if not longer. The risk of
a default will still hover over markets next week, as well, with no progress
yet toward lifting or suspending the debt ceiling. U.S. Treasury Secretary Janet
Yellen has said the U.S. could run out of measures
to avoid default by Oct. 18 if the debt ceiling isn't modified. That's not a
pleasant thought, and it could make for some challenging
weeks ahead. This week, the S&P 500 finished down 2.2%, its largest
weekly decline since late February. |
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DJIA: +1.43% to 34,326.46 The Hot
Stock: CF Industries +9.5% Best Sector:
Energy +3.4% |
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