US stocks closed sharply higher on Monday, buoyed by the FBI clearing Hillary Clinton and fortifying the prospect that she might yet win the race for the White House this week.
The S&P 500 market bellwether, which slid for nine days, losing 66 points and 3.1% in value when it was first reported Clinton faced a second FBI probe, recovered two-thirds of its losses this session.
The markets were bolstered by the latest clutch of opinion polls giving Clinton a lead over rival Donald Trump. But some investors remained wary of getting too far ahead, as happened with UK markets which wrongly priced in a remain vote in the European Union referendum in June. Read more.
The S&P 500 closed up 46 points, or 2.2%, at 2131. It was the best day of gains by the top ticker since March 1. The gains were broad on the day, with every sector rising. Financials, industrials and technology shares performed best, while telecommunications lagged behind.
The top gainer in the index was Sysco Corp (NYSE:SYY), up 9.8% to $52.76.
The S&P 500 picked up from the start of the session and just kept creeping higher, closing at the intraday high.
But it was not alone. The Dow Jones Industrial closed up 371 points, or 2.1%, at 18,259, while the Nasdaq Composite finished 2.4% higher, or 119 points, at 5166.
The S&P Midcap 400 closed up 2.1% at 1509 and led by Tenet Healthcare Corp (NYSE:THC), up 11.7% to $19.82, while the S&P Smallcap 600 finished up 2.4% at 724, and led by Blue Nile Inc (NASDAQ:NILE), up 33.9% at $40.76.
What is significant is that the same stocks which led the gains in the S&P 400, 500 and 600 at the outset stayed out front throughout the day.
The wider small-cap Russell 2000 closed up the best, up 2.5% at 1192 and also led by Blue Nile.
Meanwhile, across the border where the US election is also being felt, Toronto’s TSX Composite Index was up 1% at 14,652 and led by Capstone Mining Corp. (TSE:CS), up 6.5% to C$0.98.
Early trading
US shares shot higher on Monday – wiping out half of the 3.1% loss sustained on the S&P 500 over the past nine days - after Presidential candidate Hillary Clinton was cleared – for a second time this year – by the FBI investigating a fresh haul of emails.
The news was bolstered by a fresh opinion poll giving Clinton a lean lead over her rival Donald Trump.
The implied probability of Mrs Clinton clinching the vote climbed to 89 per cent on Monday, from as low as 83 per cent last week, according to PredictWise, a service that rounds up data from several prediction and betting markets.
But with all that, expectations of a December Fed rate hike climbed to 82% on Monday in the wake of markets pricing in a “status quo” victory by Clinton in Tuesday’s election.
The S&P 500 market bellwether was up a massive 2% at 2126, and led by Sysco Corp (NYSE:SYY), up 9.5% at $52.58 after beating first quarter earnings forecasts.
Despite the risk that a Clinton victory might punish the pharma sector, the S&P Midcap 400 was up 1.9% at 1506, and led by Tenet Healthcare Corp (NYSE:THC), up 12.9% to $20.03.
The best gains, however, belonged to the S&P Smallcap 600, which made one of its best intraday gains this year, up 2.3% at 723 and led by Blue Nile Inc (NAASDAQ:NILE), up 33.8% to $40.72 after the company announced, alongside its third quarter results, that it had agreed to be acquired by Bain Capital Private Equity and Bow Street LLC for $40.75 per Common Share.
Pre-Open
US stocks are poised to open higher on Monday, after Presidential candidate Hillary Clinton was cleared – for a second time this year – by the FBI investigating a fresh haul of emails.
However, markets will be eager not to get ahead of themselves, just one day before polling stations open for the closest-run, and ugliest, contest in decades.
For one thing, opponent Donald Trump is heckling “foul” at the fact that the FBI made a volte face just a day before America votes on a new President and Congress. The FBI came under intense pressure in the past week to drop the investigation and was accused of acting politically for announcing a fresh investigation publicly just 11 days before the election. This could make former Clinton supporters reluctant to flock back to her. They might even abstain from the poll, giving Trump an advantage.
Meanwhile, just to underscore that decision makers are readying for any eventuality, the Swiss National Bank said on Monday it is prepared to intervene to curb unwanted appreciation in the franc if Trump is elected as US president, mirroring the actions it took after the UK’s vote to leave the EU in June.
For now, the S&P 500 market bellwether is seen opening nearly 1.5% higher – breaking a nine-day fall on Friday which was on a par with 1980 when Ronald Reagan fought for the White House with Jimmy Carter.
The Nasdaq Composite was seen opening even stronger, as much as 1.6%, while the Dow Jones Industrial Average was indicated up 1.4%.
But not all stocks will share equally in the Wall Street party when the bourse reopens at 1330 GMT, following clocks going back to EST in the United States on Sunday.
While Ferrari (NYSE:RACE) is trading up 5.1% at $53.65 before the bell after the Italian car maker beat expectations for the third quarter and raised its full-year profit guidance, German prosecutors have expanded an investigation into the Volkswagen (OTCMKTS:VLKAY) emissions cheating scandal to include the automaker's chairman, Hans Dieter Potsch.
Potsch was the company's chief financial officer when the scandal erupted late last year. He became chairman soon afterward.
The German carmaker has admitted that it fitted as many as 11 million diesel vehicles worldwide with software that could cheat nitrogen oxide emissions tests. But it only came forward after the U.S. Environmental Protection Agency alerted the world to the issue.
VW’s ADRs were trading down 0.07% after hours on Friday at $28.10.
Oil prices were making good headway higher with the US benchmark WTI up nearly 1% at $44.49 on renewed hopes that OPEC will manage to deliver a glut-capping deal on supply with the support of oil exporter Russia.
After the closing bell, Marriott International (NASDAQ:MAR), News Corp (NASDAQ:NWS="" news-corp="" pre-market="" priceline="" rel="5974">NASDAQ:PCLN) – up 1.2% at $1,441.55 pre-market - report earnings.