The Dow and the S&P 500 climbed on Monday as energy, financials and defensive stocks rallied. Also, investors remained wary ahead of the U.S. midterm elections, scheduled on Tuesday, which could change the balance of power in Washington. Meanwhile, tech stocks once again weighed on the Nasdaq, with the index ending in negative territory.
The Dow Jones Industrial Average (DJI) gained 0.8% to close at 25,461.70. The S&P 500 advanced 0.6% to close at 2,738.31. The Nasdaq Composite Index closed at 7,328.85, declining 0.4%. A total of 7.07 billion shares were traded on Monday, lower than the last 20-session average of 8.76 billion shares. Advancers outnumbered decliners on the NYSE by a 1.80-to-1 ratio. On Nasdaq, a 1.13-to-1 ratio favored declining issues.
How did the Benchmark Perform?
The Dow added 190.87 points, as shares of Berkshire Hathaway Inc. (BRK.B – Free Report) rallied helping the broader financial sector. Shares of Berkshire Hathaway jumped 4.7%. The 30-stock indexed was also helped by a rally in energy stocks, led by Chevron Corporation (CVX – Free Report) . Shares of Chevron gained 3.7%. Chevron has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 gained 15.25 points, with nine of the 11 major sectors ending the day in positive territory. The Financial Select Sector SPDR (XLF) and the Energy Service Select Sector SPDR (XLE) were the best performers, gaining 1.5% and 1.7%, respectively. However, tech stocks once again suffered, with the Technology Select Sector SPDR (XLK) and the Communication Service Select Sector SPDR (XLC) declining 0.1% and 0.4%, respectively.
The tech-heavy Nasdaq, lost 28.14 points, with tech stocks taking a hit. Shares of Apple Inc. (AAPL – Free Report) and Amazon.com, Inc. (AMZN – Free Report) declined 2.8% and 2.3%, respectively.
Financials, Energy Stocks Help Markets
On Monday, markets bounced back, helped by a rally in financial stocks. Shares of Berkshire Hathaway jumped after investor Warren Buffet’s conglomerate shared over the weekend that it bought back almost $1 billion of its shares in August. This saw the broader financial sector gain heavily.
Shares of Citigroup Inc. (C – Free Report) and Bank of America Corporation (BAC – Free Report) gained 2.1% and 0.6%, respectively. Also, the energy sector, which has lagged the broader S&P 500 index this year, gained on Monday, after the United States imposed a range of sanctions on Iran.
Tech Stocks Weigh on Markets
Tech stocks once again plummeted, with shares of Apple and Amazon once again taking a hit. On Friday shares of Apple declined, sending its market value below $1 trillion at the close, a day after the company warned sales for the all-important holiday quarter may lag expectations.
Also, Amazon’s shares fell after President Donald Trump said that the administration was looking into the antitrust violations committed by the company. This weighed on the broader technology sector, leading to selloffs.
Markets Cautious Ahead of U.S. Midterm Elections
Investors also remained cautious ahead of the U.S. midterm elections, scheduled on Tuesday, which could change the balance of power in Washington. While Democrats are expected to regain control of the House, Republicans are likely to hold slim majority in the Senate. This outcome is widely seen as positive for markets given that U.S. stocks have gained during government gridlock.
However, given the current situation, if Democrats gain majority in both the chambers, it could put stocks under pressure, as that could lead to reversal of some of the policies by the GOP to boost economy. On the other hand, if GOP gains majority in both chambers, it might help stocks, as that will increases the chances of further tax cuts. This saw investors trading cautiously on Monday.
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