The major U.S. stock indexes closed higher on Thursday in a dramatic turnaround fueled by a surge in bank stocks. The jump in prices caught many investors off-guard as renewed worries about Sino-U.S. trade relations and fears of prolonged economic weakness weighed on the market most of the session.
Bank Stocks Rise on Takeover Rumors
Bank stocks gained 3.9% with Wells Fargo & Co rising 7.2% off an 11-year low on speculation that the bank could merge with peer Goldman Sachs Inc.
The developments, first reported by FOX Business’s Charlie Gasparino, drove financial shares during Thursday’s session helping boost the broader market.
Trump, Powell, Fauci Creating Headwinds
The markets recovered from significant losses earlier in the session as President Donald Trump said he was disappointed with China over its failure to contain the novel coronavirus, saying the pandemic cast a pall over his trade deal with Beijing, Reuters said.
Trump’s remarks added to concerns over a potentially extended period of economic weakness that was forecast by Federal Reserve Chairman Jerome Powell, as well as a warning from U.S. infectious disease expert Anthony Fauci that the COVID-19 outbreak was not yet under control this week, according to Reuters.
Economic data continued to signal the pain caused by the pandemic, as data showed 2.98 million Americans filed for state unemployment benefits last week, higher than economists’ estimates.
In the cash market on Thursday, the benchmark S&P 500 Index settled at 2852.50, up 32.50 or +1.24%. The blue chip Dow Jones Industrial Average finished at 23625.34, up 377.37 or +1.69% and the technology-based NASDAQ Composite closed at 8943.72, up 80.55 or +1.04%.
Declining issues outnumbered advancers for a 1.30-to-1 ratio on the NYSE and a 1.54-to-1 ratio on the NASDAQ.
The S&P Index recorded four new 52-week highs and 16 new lows, while the NASDAQ recorded 16 new highs and 110 new lows.
Wall Street’s main indexes are set for their steepest weekly drop since March, following a strong rally off their 2020 lows on hopes economic activity would pick up as virus-led restrictions are lifted.
Goldman Sachs Could Be on Hunt for Key Banking Sector Acquisition
Financial stocks rallied, helping the broader market end the day in the green after FOX Business reported that Goldman Sachs could be on the hunt for a key acquisition in the banking sector.
According to FOX Business, “Investment banking sources said speculation is growing that Goldman, under CEO David Solomon, will seek a deal with a major commercial bank in the coming months, which would be a radical shift for a firm that has valued its independence as a “white shoe” investment bank since its founding in 1869.”
This article was originally posted on FX Empire
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