October began on Wall Street much better than September ended. The Dow posted a strong gain of 482 points, or 1.4%, to 34,326; the S&P 500 rose 49 points, or 1.1%, to 4,357; and the Nasdaq rose 118 points, or 0.8%, to 14,566. The AP gives much of the credit to positive news on the COVID front, specifically Merck's announcement that a potential pill to treat the virus did extremely well in clinical trials. Companies that would benefit from a post-pandemic return to normalcy fared well, including United Airlines (up 7% in afternoon trading), casino owner Caesars Entertainment (5.5%), and Live Nation Entertainment (8%).
“We have seen this rotation back to the so-called reopening plays and the more cyclical areas, which I think makes a lot of sense over the next couple of weeks as we think about the Covid trends improving, with the cases falling from last month’s peak, and the news about the Merck pill appears promising,” Angelo Kourkafas of Edward Jones tells CNBC. The strong day came after the major indexes closed out a rough September, with the S&P down 4.8% for the month, the Dow down 4.3%, and the Nasdaq down 5.3%. For the benchmark S&P, that snapped a seven-month winning streak. (Read more stock market stories.)