Stocks rally on Fed's plan to buy individual corporate bonds

The Fed offers more support to the markets

U.S. equity markets marched higher closing with gains on Monday after the Federal Reserve announced plans to buy individual corporate bonds, building on a rally that began after investors shrugged off a resurgence in new COVID-19 infections.

Ticker Security Last Change Change %
I:DJI DOW JONES AVERAGES 34580.08 -59.71 -0.17%
SP500 S&P 500 4538.43 -38.67 -0.84%
I:COMP NASDAQ COMPOSITE INDEX 15085.471504 -295.85 -1.92%

The Dow Jones Industrial Average rose over 157 points or 0.62 percent, with the Dow battling back from a loss of more than  762 points, or 2.98 percent earlier in the session. The S&P 500 rose 0.83 percent while the Nasdaq Composite rose 1.43 percent, both also reversed morning losses.

Stocks are coming off the worst week for in three months, which saw the benchmark S&P 500 shed 4.78 percent.

The Fed's announcement is viewed by traders as an additional stimulus to the markets and is part of the CARES Act, which was established to help American families and businesses throughout the coronavirus pandemic.

A new outbreak in Beijing, which forced parts of the Chinese capital into lockdown, rattled markets overnight. In the U.S., Florida and Texas are among the states that have seen a spike in the number of infections.

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Meanwhile, economic data continued to point to a sharp rebound in the U.S. economy as the June reading of New York Fed manufacturing printed surged to -0.2 from last month’s reading of -48.5. Analysts surveyed by Refinitiv were expecting a print of -29.8.

Looking at stocks, airlines, cruise operators and other travel-related names were in focus amid fears that a second wave of the pandemic is developing.

Recently bankrupt rental car company Hertz will sell up to $500 million of stock, according to a regulatory filing.

Ticker Security Last Change Change %
AAL AMERICAN AIRLINES GROUP, INC. 16.62 -0.80 -4.59%
CCL CARNIVAL CORP. 17.20 -0.69 -3.86%
HTZ HERTZ GLOBAL 24.06 -0.22 -0.91%

Elsewhere, drugmaker AstraZeneca has reached a deal to provide Europe with 400 million doses of its experimental COVID-19 vaccine. Deliveries could begin by yearend if the vaccine is proven to be effective.

Ticker Security Last Change Change %
AZN ASTRAZENECA PLC 54.23 -0.56 -1.02%

Walt Disney will reopen Hong Kong Disneyland with limited capacity on June 18, the company announced on Monday. Visitors will be asked to fill out health forms, wear masks and have their temperatures taken upon entering the park. Once in the park, they will be asked to adhere to social-distancing guidelines.

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Cboe Global Markets reopened its Chicago-based trading floor on Monday. The exchange asks traders to wash their hands before entering the trading floor and to wear masks.

Ticker Security Last Change Change %
DIS THE WALT DISNEY CO. 146.22 -0.98 -0.67%
CBOE CBOE GLOBAL MARKETS, INC. 129.08 -0.70 -0.54%

BP will take a write-down of up to $17.5 billion when it reports second-quarter results on Aug. 4, and said the COVID-19 pandemic will lead to a faster transition away from fossil fuels. The energy giant expects Brent crude oil will average $55 per barrel through 2050, down about 30 percent from its previous forecast.

Ticker Security Last Change Change %
BP BP PLC 26.91 -0.15 -0.55%

West Texas Intermediate crude oil reversed earlier losses and closed higher by 2.37  percent higher at $37,12 a barrel while gold slid 0.52 percent to $1,720.30 an ounce.

U.S. Treasurys were little changed with the yield on the 10-year note holding near 0.701 percent.

Britain’s FTSE paced the decline in Europe, down 0.66 percent, while France’s CAC and Germany’s DAX were off 0.49 percent and 0.32 percent, respectively.

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In Asia, Japan’s Nikkei fell 3.47 percent, Hong Kong’s Hang Seng lost 2.16 percent and China’s Shanghai Composite shed 1.02 percent.