All 11 Sectors Rise as Fed Remains Dovish

John Divine


Typically, the Federal Reserve helps guide the economy by adjusting interest rates and buying Treasurys. But in 2020, the typical movements of money have been thrown out the window.

Stimulated by the Fed's announcement on Monday that it would start to buy individual corporate bonds, the stock market ended broadly higher on the day as the anxiety permeating markets in early trading dissipated.

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The purchases of individual investment-grade corporate bonds will help keep borrowing costs for large American businesses low.

The Dow Jones Industrial Average finished up 157 points, or 0.6%, to finish at 25,763.

All 11 sectors in the S&P 500 were higher on Monday. Financials (+1.4%) and consumer staples (+1.1%) led the way, while health care (+0.2%) and energy (+0.1%) finished as laggards on the day.

Tesla taking to Texas? Electric automaker Tesla (ticker: TSLA) is reportedly in talks with Travis County, Texas, over an incentive package that could bring a factory to the Austin area. The county commission could vote on a proposal as imminently as the next few weeks, and Tulsa, Oklahoma has also reportedly made the shortlist for a factory.

The automaker's current U.S. plant is in Fremont, California, although Tesla CEO Elon Musk has recently gotten into a very public spat with local officials there as the municipality and Tesla clashed over reopening facilities. Musk even threatened on Twitter to move Tesla operations to another state.

Zoom keeps zooming. Sometimes even "obvious" stock market plays can be extremely rewarding, as Zoom Video Communications ( ZM) continued to prove on Monday. Although its valuation now appears incredibly stretched for any investors using traditional valuation metrics. ZM stock is now going for about 75 times sales -- so the stock remains oblivious to such concerns.

One of the most visible beneficiaries of the work-from-home trend sparked out of necessity in the wake of the pandemic, Zoom shares rose nearly 9% on Monday. The videoconferencing stock is now up more than 200% year to date.