The stock market was making an impressive rebound in afternoon trading Monday, rising as the 10-year Treasury yield continued to decline.
The Nasdaq composite erased a 1% loss and was up 0.9% in afternoon trading. The index is now back above the 13,000 level. The S&P 500 climbed 0.7% and regained its 200-day moving average. The small-cap Russell 2000 was up 0.4%.
The Dow Jones Industrial Average was flat after erasing losses. Walgreens Boots Alliance led the Dow with a 4.5% increase. JPMorgan upgraded the stock to overweight from neutral as Tim Wentworth began work as the company's new chief executive.
Apple may avoid a seventh straight drop, which would be the longest since January 2022, according to Dow Jones Market Data. The stock found support at its 200-day moving average and was up 0.4% Monday afternoon.
Strength in megacaps seemed to be the day's theme. Facebook-parent Meta Platforms was up 2.4%. Microsoft tacked on 1.7%, and Nvidia advanced nearly 4%.
Volume rose on the Nasdaq and fell on the New York Stock Exchange vs. the same time on Friday. Advancing and declining stocks were nearly even on the Nasdaq while winners had a slight edge on the NYSE.
The Innovator IBD 50 ETF also reversed higher, up 0.4% after falling to the lowest level since July 2016. Of note, IBD 50 stock Chubb fell below the 50-day moving average as its breakout at 216.09 sputters.
The 10-year Treasury yield climbed as high as 5.017% earlier today. At 1:30 p.m. ET, the yield eased to 4.85%.
Stock Market Faces Big Risks
While index rebounds looked promising, the stock market has more work to do before investors can call a bottom. This week, multiple risks face the market.
Geopolitical risk grew as Israel intensified strikes in Gaza, and the conflict threatened to expand into Lebanon and other areas. Hamas continues to hold hundreds of hostages, as diplomatic efforts continue to try to free them and to provide aid to Gaza residents.
The stock market today also faces a week of major earnings reports, including Microsoft, Meta, Google-parent Alphabet and Amazon.com.
The energy sector saw big merger news Monday, when Chevron agreed to acquire Hess in a stock deal valued at $53 billion. Hess is an oil and gas producer with operations in North Dakota and has a stake in a massive oil find in Guyana.
Chevron stock gapped down 2.9% in heavy afternoon volume, while Hess shares reversed slightly lower. The deal marked the latest move by a U.S. oil major to consolidate production, following Exxon Mobil's $60 billion acquisition of Pioneer Natural Resources just two weeks ago.
Stocks See M&A Activity
Deal-related trading accounted for some movement in Monday's stock market.
Roche Holding agreed to buy immunology company Telavant for $7.1 billion. Roivant Sciences, which owns a 75% stake in Telavant, fell 5%. Pfizer, which owns the remaining 25%, climbed 1.2%. Roche's U.S.-traded shares were down 0.4%.
Textainer shares soared 44% after the company announced it will go private through an acquisition by private equity firm Stonepeak. The deal values the shipping container leasing firm at $50 per share in cash, or more than $2 billion.
Vista Equity Partners announced it will acquire EngageSmart in a $4 billion deal. Vista is offering shareholders $23 a share. ESMT shares jumped 12%. EngageSmart develops cloud-based software to manage medical offices. It also offers electronic-invoice technology.
