AP

Wall Street rallies ahead of a potentially turbulent week

Nov 2, 2020, 9:38 AM
People walk past a bank's electronic board showing the Hong Kong share index at Hong Kong Stock Exc...
People walk past a bank's electronic board showing the Hong Kong share index at Hong Kong Stock Exchange Monday, Nov. 2, 2020. Asian shares were mostly higher Monday, buoyed by profit-taking after earlier dips and optimism over strong data on Chinese manufacturing. (AP Photo/Vincent Yu)
(AP Photo/Vincent Yu)

NEW YORK (AP) — U.S. stocks are climbing Monday, kicking off a potentially turbulent stretch for markets, as Wall Street recovers some of its sharp sell-off from last week.

The S&P 500 was 1% higher in early trading after more companies reported stronger profits for the summer than Wall Street feared. The Dow Jones Industrial Average was up 273 points, or 1%, at 26,774, as of 9:42 a.m. Eastern time, and the Nasdaq composite was 1.2% higher. They followed up on gains across Europe and Asia after reports there on manufacturing were stronger than expected.

Caution, though, was continuing to hang over markets as the pandemic raises worries that customers will stay away from businesses and pushes more European governments to bring back restrictions. Treasury yields were falling.

It’s an incredibly busy week for markets, with the Federal Reserve announcing its latest decision on interest rates Thursday, the U.S. Labor Department releasing its market-moving monthly jobs report on Friday and roughly 130 companies in the S&P 500 scheduled to report their results for the summer through the week.

Blaring above them all is Tuesday’s Election Day. Markets have veered sharply in recent weeks as investors deal with uncertainty about who will control Washington, and what that means for the chances of the U.S. government delivering more aid for the economy.

Many professional investors say they plan to hold steady through whatever volatility the election creates because history shows politics don’t have a very strong correlation with market returns over the longer term. But they’re nevertheless girding for potentially big swings in the interim.

The feared scenario for investors is a contested election, where it could take weeks for a winner of the White House to emerge. Markets famously hate uncertainty, and many along Wall Street expect stocks to drop in such a scenario.

Which party gets control of the Senate may be just as important as the presidency. If Democrats can gain complete control of Washington, many investors expect them to deliver a big dose of support for the economy. That plus “more predictable trade policy” could offset the higher tax rates and tighter regulations that would likely come out of a Democratic-controlled Washington, which the BlackRock Investment Institute says could lead to a better environment for stocks and other risky investments.

Democrats and Republicans have been haggling about a stimulus renewal for months, since the last round of supplemental benefits for laid-off workers and other stimulus expired. But a deep partisan divide has so far stymied them.

The U.S. economy has been showing a mixed performance recently. Investors and economists alike say the economy needs another shot of stimulus, particularly when coronavirus counts are accelerating at troubling rates across Europe and much of the United States. So far, the toughest restrictions on daily life and businesses have not returned. But even if they don’t, the worry is that fear about the virus will keep customers away from businesses by itself.

Corporate profits, meanwhile, are weaker than year ago levels but continue to be better than Wall Street had feared.

Estee Lauder jumped 5.2% for one of the largest gains in the S&P 500 following its better-than-expected profit report. Sales weakened by 9% from a year earlier as some stores were closed, but it said it benefited from strong sales growth in China.

The world’s second-largest economy has been a relative bright spot in the global economy recently. A major indicator for China’s manufacturing sector reported a rise on Monday, which showed that domestic demand is holding up.

That helped drive Asian stocks higher, along with encouraging data for Japan and India. Japan’s Nikkei 225 rose 1.4%, South Korea’s Kospi climbed 1.5%, Hong Kong’s Hang Seng added 1.5% and stocks in Shanghai inched up by less than 0.1%.

In Europe, France’s CAC 40 rose 2.2%, and Germany’s DAX returned 2% after a survey showed industrial output was at a strong level in October in the eurozone, just as new limits are being reimposed on public life. The FTSE 100 in London climbed 1.3%.

But in a show of continued caution, the yield on the 10-year Treasury fell to 0.84% from 0.88% late Friday.

___

AP Business Writer Yuri Kageyama contributed.

Today’s Top Stories

AP

Ketanji Brown Jackson takes the oath for the Supreme Court....
MARK SHERMAN Associated Press

Jackson sworn in, becomes 1st Black woman on Supreme Court

Judge Ketanji Brown Jackson, 51, will be sworn as the court's 116th justice Thursday, just as the man she is replacing, Justice Stephen Breyer, retires.
22 hours ago
The Supreme Court is pictured. The court just limited the EPA...
MARK SHERMAN Associated Press

Supreme Court limits EPA in curbing power plant emissions

The Supreme Court on Thursday limited how the nation's main anti-air pollution law can be used to reduce carbon dioxide emissions from power plants.
22 hours ago
President Joe Biden speaks during a news conference on the final day of the NATO summit in Madrid, ...
DARLENE SUPERVILLE and ZEKE MILLER Associated Press

Biden says transatlantic alliance has adapted to new threats

Biden's comments came at a press conference in Madrid at the conclusion of the annual meeting of NATO leaders and after he attended a summit with the Group of Seven advanced democratic economies in the Bavarian Alps.
22 hours ago
A Rite Aid logo is displayed on its store...
HALELUYA HADERO, AP Reporter

Amazon, Rite Aid cap purchase of emergency contraceptives

Retailers limiting purchases is standard practice that helps retailers prevent stockpiling and reselling at higher prices.
22 hours ago
FILE - Hershel "Woody" Williams, center, the sole surviving U.S. Marine to be awarded the Medal of ...
The Associated Press

Last remaining WWII Medal of Honor recipient dies at 98

A 98-year-old man from West Virginia, who was the last Medal of Honor recipient from World War II has died.
2 days ago
Mourners pay their respects at a makeshift memorial at the site where officials found dozens of peo...
The Associated Press

Toll now at 53 in San Antonio as families wait for answers

The families of the dead migrants found inside a tractor-trailer earlier this week are waiting for answers.
2 days ago

Sponsored Articles

Tax Harassment...
Jordan Wilcox

The best strategies for dealing with IRS tax harassment | You have options!

Learn how to deal with IRS tax harassment. This guide will teach you how to stop IRS phone calls and letters, and how to handle an IRS audit.
spend a day at Bear Lake...
Bear Lake Convention and Visitors Bureau

You’ll love spending the day at Bear Lake | How to spend a day at Bear Lake

Bear Lake is a place that needs to be experienced. Spend a day at Bear Lake.
Curb Appeal...
Price's Guaranteed Doors

How to have the best of both worlds for your house | Home security and curb appeal

Protect your home and improve its curb appeal with the latest security solutions like beautiful garage doors and increased security systems.
Prescription opioids can be disposed of during National Prescription Take Back Day...
Know Your Script

Prescription opioid misuse | How to protect your family from the opioid epidemic

Studies have shown that prescription opioid misuse has increased since COVID-19. So what do you need to know about these opioids?
national heart month...
Intermountain Healthcare

National Heart Month: 5 Lifestyle Changes to Make Today to Keep You Heart Healthy

Heart disease is the leading cause of death for both men and women. One person dies every 36 seconds in the United States from cardiovascular disease
Joseph Smith Memorial Building...
Temple Square

The Joseph Smith Memorial Building is an icon of Salt Lake City | Why hosting an event at this beautiful location will make you a hero this year

Here's why hosting an event at the iconic Joseph Smith Memorial Building in downtown Salt Lake City will make you a hero this year.
Wall Street rallies ahead of a potentially turbulent week