By Geoffrey Smith
Investing.com -- U.S. stock markets opened higher on Monday, buoyed by hopes for a last-minute agreement on a comprehensive fiscal stimulus package before the elections on November 3.
House Speaker Nancy Pelosi said at the weekend that there were still two days to bridge what appear to be still-wide differences with the Republican administration and Senate over a package, while Senate Leader Mitch McConnell said he would schedule votes on a suite of individual relief measures. While that is unlikely to be enough in itself to get any such measures enacted, it keeps the two sides at least superficially moving towards each other.
Trading is increasingly being overshadowed by the looming elections on November 3, with the consensus expectation of a 'Blue Wave' outcome encouraging expectations of a major fiscal stimulus package in the new year.
Analysts at Goldman Sachs (NYSE:GS) argued in a weekly preview that the size of future stimulus will depend largely on the margin of victory, adding that things depend "more on the outcome of Senate elections than the presidential election result." Should the Republican Party keep control of the Senate, Jan Hatzius and his team argued, then the ultimate package is likely to be closer to the Senate's current proposals than to the House's.
By 9:35 AM ET (1335 GMT), the Dow Jones Industrial Average was up 78 points, or 0.2%, at 28,676 points. The S&P 500 was also up 0.5% and the NASDAQ Composite was up 0.8%.
Oil and gas stocks were supported somewhat by the confirmation of ConocoPhillips (NYSE:COP) agreeing to buy shale producer Concho Resources (NYSE:CXO) for $9.7 billion, the biggest acquisition in the sector this year. However, a fourth straight quarterly loss and grim outlook from Halliburton (NYSE:HAL) underlined the problems the sector continues to face. ConocoPhillips stock was down 1.0%, on perceptions that it may have overpaid. Concho stock, which had risen over 10% last week on reports of the deal happening, gave up 0.2%.
Earlier, the day's only data release of note, the NAHB housing market index, leaped to another all-time high of 83, underscoring the strength of the momentum in a housing market where the pandemic appears to have caused a wave of generational shift in preferences for larger, if less central, properties.
There were a couple of bright performances amongst beaten-down cyclical stocks, with Hertz Global (NYSE:HTZ) stock rising another 14% as its securing of debtor-in-possession financing carves out a path for it to leave Chapter 11 bankruptcy. United Airlines (NASDAQ:UAL) stock also rose 3.2% in anticipation of the FAA approving the return to service of the Boeing (NYSE:BA) 737 MAX.
AMC Entertainment (NYSE:AMC) stock meanwhile rose 15% after New York Governor Andrew Cuomo gave the go-ahead for theaters outside New York City to open from Friday. AMC said it will have some 530 theaters open by the end of the month, although whether that will be enough to convince the big studios to resume big releases over the holiday period will still depend on how the pandemic develops. The rate of new infections and hospital admissions in the U.S. has been rising constantly since mid-September.