Nasdaq rises 1.3% as oil retreats and Chicago and Texas activity indicators improve
Key Facts
The S&P 500 rose 0.9% and the Nasdaq gained 1.3% on the morning of Monday, October 26, while the Dow Jones advanced 242 points, or 0.5%, at 11 a.m. Eastern time, according to the Associated Press. The news agency linked the stock gains to lower oil prices, which eased pressure on travel companies with high fuel costs. Brent crude fell 1.4% to $110.17 a barrel during the morning. Royal Caribbean rose 2.1%, United Airlines gained 3.2% and Delta Air Lines advanced 2.3%. In closing data, the S&P 500 stood at 7,696.15 points on October 26, compared with 7,623.68 points in the previous session, according to EL7 data.
Monday's gains followed Friday's session, in which the S&P 500 lost 0.5%, posting its second consecutive weekly decline, while the Dow Jones fell 1.2% and the Nasdaq dropped 0.2%. Brent had risen 3.1% to $116.72 a barrel that same Friday, after trading below $97 at the start of October, reaching its highest level since June 2022. The Associated Press said Monday's rise in the S&P 500 offset its losses from the previous week and brought it to within 1.6% of its record high set earlier in the month. Nvidia led gains in the index, rising 3.1% after three consecutive weekly losses. The stock thus recouped part of its earlier decline, the news agency said.
Among regional data, the Chicago Fed National Activity Index rose to 0.07 in September, after a reading of -0.08 in August, according to the Chicago Federal Reserve series published through FRED. In Texas, the general business activity index in the manufacturing survey came in at 13.4 points in October, compared with 9.8 in September, according to the Federal Reserve Bank of Dallas. The factory production index rose to 29.5 points from 16.1 in the previous month. But the new orders index moved in the opposite direction, falling to 9.3 points from 30.7 in September. The readings present a mixed picture in the Dallas survey, with improved activity and production alongside a decline in the new orders index.
In company news, Bon Secours Mercy Health agreed to acquire Surgery Partners for about $5.7 billion, according to an Axios report. The offer is $23.50 per share, a 49.2% premium to Friday's closing price. The deal shifts the focus on the company from daily share-price movements to a takeover offer with a specified value and price. Surgery Partners said it has more than 5,000 physicians working across more than 300 facilities in 30 states. This geographic reach offers a glimpse of the scope of the company's operations targeted by the deal.
Artificial intelligence stocks remained volatile amid investor concerns about the rising cost of borrowing for companies building data centers and buying more chips, according to the Associated Press. Meta announced plans to raise $35 billion through a share sale to fund its investments in artificial intelligence. The company said it could raise an additional $60 billion through the sale of a new class of non-voting shares. Attention is also turning to quarterly results from Alphabet and Microsoft on Wednesday, followed by Amazon's results on Thursday. Investors are watching what the results will reveal about returns on artificial intelligence spending, the news agency said.
The Federal Reserve will hold its Federal Open Market Committee meeting on October 27 and 28, with its chair scheduled to hold a press conference on October 28. The Associated Press said the central bank was likely to leave interest rates unchanged at the end of the meeting, after raising them at its September meeting. The 10-year Treasury yield fell to 4.97% on October 26, from 5.00% late Friday, alongside expectations of an unchanged rate reported by the news agency. Before the Fed's decision, the U.S. Census Bureau will release its advance report on durable goods orders and new home sales data on October 27, both for September. This puts activity and demand data, along with the monetary policy meeting, on markets' watch list over two consecutive days.