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U.S. Stocks Rally As Bernie Sanders Drops Out Of Presidential Race

wallstreet aug22 08apr20 lt

Stocks fluctuated early in the trading day on Wednesday but have moved sharply higher over the course of the session. The major averages have surged more firmly into positive territory, more than offsetting the modest losses posted on Tuesday.

In recent trading, the major averages have pulled back off their new highs but continue to post strong gains. The Dow is up 526.13 points or 2.3 percent at 23,179.99, the Nasdaq is up 143.88 points or 1.8 percent at 8,031.14 and the S&P 500 is up 57.00 points or 2.1 percent at 2,716.41.

Further buying interest was generated in late morning trading in reaction to news Senator Bernie Sanders, I-Vt., is dropping out of the race for the Democratic presidential nomination.

Sanders' decision to end his presidential campaign sets up a general election matchup between President Donald Trump and former Vice President Joe Biden.

With the campaign virtually shut down due to the coronavirus pandemic, Sanders was widely seen as unlikely to overtake Biden in the race for delegates.

Nonetheless, the move by Sanders still seems to have soothed investors concerned about the self-described Democratic Socialist enacting his more progressive policies.

Stocks moved mostly higher earlier in the session as traders continued to express optimism that some of the counties hit hardest by the coronavirus pandemic are flattening the infection curve.

Data from Johns Hopkins University shows confirmed coronavirus cases in the U.S. have reached nearly 400,000, the most in the world.

However, the latest data from the university also shows that the number of new cases has decreased in recent days after reaching a peak last Friday.

The number of new coronavirus cases has also recently shown significant downturns in Italy and Spain, which currently have the most confirmed cases in Europe.

Adding to the positive sentiment, White House health advisor Dr. Anthony Fauci told Fox News the U.S. could see the "beginning of a turnaround" after a "bad week for deaths" this week.

Fauci noted deaths are a lagging indicator and pointed to the decrease in the number of new cases and a lower rate of hospitalizations.

Early buying interest was somewhat subdued, however, as some analysts have warned that the rebound from last month's lows has been overdone.

Sector News

Housing stocks have moved sharply higher over the course the trading session, driving the Philadelphia Housing Sector Index up by 6.3 percent.

Substantial strength also remains visible among energy stocks, which are moving higher along with the price of crude oil. Crude for May delivery is climbing $0.85 to $24.48 a barrel after plunging $2.45 to $23.63 a barrel on Tuesday.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index is up by 4.5 percent and the NYSE Arca Oil Index is up by 3.6 percent.

Banking stocks have also shown a significant move to the upside as the day has progressed, with the KBW Bank Index surging up by 4 percent.

Commercial real estate, semiconductor and steel stocks are also seeing considerable strength, moving higher along with the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index jumped by 2.1 percent, while Hong Kong's Hang Seng Index slid by 1.2 percent.

The major European markets also turned mixed over the course of the session. While the French CAC 40 Index inched up by 0.1 percent, the German DAX Index dipped by 0.2 percent and the U.K.'s FTSE 100 Index fell by 0.5 percent.

In the bond market, treasuries are seeing modest weakness, extending the pullback seen over the two previous sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.2 basis points at 0.748 percent.

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