Major benchmarks hit record highs on Monday after the Senate gave its consent to pass a Bill that ends the current government shutdown. Meanwhile, biotech sector rallied following major biotech merger deals. This led the Nasdaq higher which ended at a record. The Dow and the S&P also ended in record territory.
The Dow Jones Industrial Average (DJI) increased 0.6%, to close at 26,214.60. The S&P 500 rose 0.8% to close at 2,832.97. The tech-laden Nasdaq Composite Index closed at 7,408.03, gaining 1%. The fear-gauge CBOE Volatility Index (VIX) decreased 3.6% to close at 10.87. A total of around 6.56 billion shares were traded on Monday, higher than the last 20-session average of 6.34 billion shares. Advancers outnumbered decliners on the NYSE by a 1.70-to-1 ratio. On Nasdaq, a 1.38-to-1 ratio favored advancing issues.
Biotech ETF Surges, Pushes Nasdaq Higher
The iShares Nasdaq Biotechnology ETF (IBB) surged 3.1% on Monday following a couple of merger deals in the biotech sector worth billions of dollars. Touted to be the largest biotech ETF, iShares Nasdaq Biotechnology is trading at its highest levels since October 2017.
Shares of Juno Therapeutics, Inc. skyrocketed 26.8% on Monday after it entered into an agreement with Celgene Corp. (CELG - Free Report) to be purchased for a whopping $9 billion. In other deal news, Bioverativ Inc. agreed to purchase Sanofi (SNY - Free Report) for $12 billion. Following such news, shares of Bioverativ rallied 63%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
These developments led to broad based gains for the biotech sector and also pushed the Nasdaq higher. The tech-laden index surged 71.7 points to end the session at an all-time high. Gains for Nasdaq were further supported by a surge of 3.2% in the shares of Netflix (NFLX - Free Report) .
Dow and S&P 500 Post Record Closes
The S&P 500 gained 22.7 points to hit a record high. Of the 11 major segments of the S&P 500, 10 ended in the green, with consumer discretionary shares leading the advancers. The Energy Select Sector SPDR ETF (XLE) and Consumer Discret Sel Sect SPDR ETF (XLY) gained 2.2% and 1.1%, respectively.
The Dow amassed 142.9 points to finish at a record close. Such gains were rather broad based and followed the Senate’s decision to approve a bill that would end the government shutdown.
Senate Approves a Bill to Prevent Shutdown
On Monday, the Senate approved a Bill which paved way for the ongoing government shutdown to end. The House had already passed a one-month spending Bill on Jan 18 to keep the government funded up until Feb 16, 2018. However, the Bill did not find much favor in the Senate and therefore could not reach the 60-vote mark to clear the Senate. The Senate adjourned without further voting for a final outcome on Thursday.
The funding to keep the government funded ended on Saturday, leading to a shutdown. This shutdown stretched through Monday after lawmakers in the United States failed to reach a resolution on the issue. This was due to negotiations related to immigrations, discussions over which bothered the Republican-led Congress for most of Sunday.
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