Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., September 28, 2023. REUTERS/Brendan McDermid Acquire Licensing Rights
Oct 9 (Reuters) – Wall Street’s major indexes reversed earlier losses on Monday while energy stocks rallied with oil prices and investors digested the latest news about the conflict between Israel and the Palestinian Islamist group Hamas.
The Israeli military said it called up an unprecedented 300,000 reservists and was imposing a total blockade of the Gaza Strip in signs it could be planning a ground assault there to defeat Hamas which launched a deadly attack over the weekend.
But late in the afternoon, a senior Hamas official said the group is open to discussions over a possible truce with Israel, having “achieved its targets.”
Israeli Foreign Minister Eli Cohen said more than 100 people were taken captive by Hamas. And Qatari mediators tried to negotiate freedom for Israeli women and children seized by Hamas and held in Gaza in exchange for the release of 36 Palestinian women and children from Israel’s prisons, a source briefed on the talks told Reuters.
U.S. President Joe Biden said he directed his team to coordinate with regional partners to warn anyone seeking to take advantage of the situation. U.S. Defense Secretary Lloyd Austin said the United States will send multiple military ships and aircraft closer to Israel as a show of support.
The Dow Jones Industrial Average (.DJI) rose 192.12 points, or 0.58%, to 33,599.7. The S&P 500 (.SPX) gained 27.9 points, or 0.65%, at 4,336.4 and the Nasdaq Composite (.IXIC) added 58.70 points, or 0.44%, at 13,490.04.
The U.S. bond market was shut on Monday for Columbus Day, also known as Indigenous Peoples’ Day. A recent surge in U.S. Treasury yields had pressured equities.
On Monday, however, the iShares Core 10+ years U.S. bond Exchange Traded Fund (ETF> rose more than 1% and the iShares 20+ years Treasury bond ETF (TLT.O) was up almost 2%.
“The occurrence in the Middle East is going to bump up energy and there’s a flight to quality given the uncertainty in the geopolitical sphere,” said Alex McGrath, chief investment officer for NorthEnd Private Wealth in Greenville, South Carolina.
Also on Monday Federal Reserve officials indicated that rising yields on long-term U.S. Treasury bonds, which directly influence financing costs for households and businesses, could steer the Fed from further hikes in its short-term policy rate.
Traditional safe-haven assets climbed with gold rising more than 1% although the U.S. dollar index gave up earlier gains and was last down 0.1%.
But with oil prices advancing on concerns that the conflict would hamper supplies, energy (.SPNY) was the top S&P 500 sector gainer, up almost 4% and on track for its biggest single-day advance in six months.
United Airlines (UAL.O), Delta Air Lines (DAL.N) and American Airlines (AAL.O) suspended direct flights to Tel Aviv. Shares of the airlines, also hurt by rising oil prices, each fell around 4%, dragging the S&P 500 Passenger Airlines index (.SPLRCALI) down more than 3%.
Defense companies rallied after the news, with the S&P 500 Aerospace & Defense index (.SPLRCAERO) rising more than 5% while Northrop Grumman (NOC.N) was up 11%. L3Harris Technologies (LHX.N) rose 10%.
Exchange-traded funds exposed to Israel were selling off, with iShares MSCI Israel ETF falling more than 7% while and the ARK Israel Innovative Technology ETF slid 4%.
Advancing issues outnumbered decliners on the NYSE by a 2.22-to-1 ratio; on Nasdaq, a 1.02-to-1 ratio favored decliners.
The S&P 500 posted six new 52-week highs and 19 new lows; the Nasdaq Composite recorded 31 new highs and 292 new lows.
Reporting by Sinéad Carew in New York, Shashwat Chauhan and Ankika Biswas in Bengaluru; Editing by Arun Koyyur, Shounak Dasgupta and Richard Chang
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