Stocks – Dow Turns Positive on Late-Day Buying as Energy, Tech Shine

This post was originally published on this site – The Dow cut losses to end Monday in positive territory, buoyed by a wave of late buying ahead of the close in energy and technology stocks.              

The Dow Jones Industrial Average rose 0.11%, or 26 points, the S&P 500 gained 0.42%, and the Nasdaq Composite rose 1.23%.

Oil prices pared intraday losses to settle 3% higher for the day, spurring a sharp rise in energy stocks, with investors seemingly betting on a return in crude demand as the reopening of the economy continues.

Valero Energy (NYSE:VLO), Marathon Petroleum (NYSE:MPC) and Phillips 66 (NYSE:PSX), were among the biggest gainers, with the latter surging nearly 8%.   

Technology also underpinned the turn higher in the broader market, as FAANG names continued to attract demand following earnings from Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN) and Google-parent Alphabet (NASDAQ:GOOGL) last week.

Elsewhere, Walt Disney (NYSE:DIS) cut losses to end the day 2% lower. Moffett Nathanson downgraded its rating on Disney to neutral from buy, just a day ahead of its earnings, on worries that its results were likely to suffer a worst-than-expected hit from coronavirus-led disruptions to its studio and theme parks businesses. 

Wall Street didn’t have the best of starts to the session after U.S. President Donald Trump stoked U.S.-China tensions as he continued to pin blame on China over its handling of the coronavirus.  

In a virtual townhall on Fox News, U.S. President Donald Trump accused Beijing of making a “horrible mistake” and likening their actions to putting gasoline on an uncontrollable fire.

In recent days, The Trump administration has been exploring ways of moving supply chains away from China as the pandemic has highlighted how vulnerable the U.S. is to overseas producers in times of crisis.

As a matter of national security, many in the administration have been pushing to bring production of these lifesaving elements, including medical equipment and drugs, back to the U.S., Stifel said in a note.

Warning that the Covid-19 pandemic had changed the fundamentals for airlines, Berkshire Hathaway (NYSE:BRKa) Chairman Warren Buffett said the company had sold its major stakes in airlines stocks during the previous quarter.

American Airlines (NASDAQ:AAL) dropped 7.8%, United Airlines (NASDAQ:UAL) fell 5.11% and Delta Air Lines (NYSE:DAL) lost 6.3%.

Buffet also signaled the broader market has remained too frothy for his liking, as Berkshire held off making significant purchases despite the selloff in March.

“We have not done anything because we don’t see anything attractive to do,” he said.

The positive end to the day, comes as some on Wall Street have suggested that economic activity had bottomed.

“Economic activity has probably bottomed now,” Goldman Sachs (NYSE:GS) said in a report on Monday. “Lockdowns and social distancing are starting to diminish as many countries are cautiously reopening their economies.”

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