Markets Live, Monday, 4 October, 2021

On Oct 4, 2021

Wall Street stocks surged to a higher close on Friday (US time), entering the final quarter of 2021 in a buying mood boosted by positive economic data, progress in the battle against COVID, and Washington developments on the potential passage of an infrastructure bill.

All three major US stock indexes seesawed earlier in the session, but began trending higher by late afternoon, led by economically sensitive cyclicals.

The rally gained momentum after the White House announced US President Joe Biden was getting more involved in negotiations over the infrastructure spending bill being debated on Capitol Hill.

Moderna shares slid 11.4 per cent on Friday in the US after competitor Merck announced a new drug that could drastically reduce COVID hospitalisations and deaths. Credit:Alex Ellinghausen

Even so, all three indexes ended below last Friday’s close, falling between 1.4 per cent and 3.2 per cent, with the S&P 500 and the Nasdaq Composite posting their biggest weekly percentage drops since February. The Australian sharemarket is poised for a bright start on Monday, with futures pointing to a gain of 52 points, or 0.7 per cent, at the open.

“There was a broad-based recovery today. Markets were not fixated today on new taxes or tapering,” said David Carter, chief investment officer at Lenox Wealth Advisors in New York.

While Biden signed into law a stop-gap bill to keep the government running through Dec. 3, lawmakers only succeeded in kicking the can down the road.

This lack of resolution prompted rating agency Fitch to warn that the United States’ ‘AAA’ credit rating could be at risk.

A host of economic data released on Friday showed increased consumer spending, accelerated factory activity and elevated inflation growth, which could help nudge the US Federal Reserve toward shortening its timeline for tightening its accommodative monetary policy.

The Dow Jones Industrial Average rose 482.54 points, or 1.43 per cent, to 34,326.46; the S&P 500 gained 49.5 points, or 1.15 per cent, at 4,357.04; and the Nasdaq Composite added 118.12 points, or 0.82 per cent, at 14,566.70.

Of the 11 major sectors in the S&P 500, all but healthcare stocks ended higher.

The sector was weighed down by a 11.4 per cent drop in shares of COVID vaccine maker Moderna Inc in the wake of the Merck news.

Reuters