Market Recap: Monday, September 28

Stocks jumped Monday as the major indices looked to recuperate some of their losses over the past several weeks. The Dow gained more than 500 points, or 1.9%, with about an hour left to go in the regular trading day, after the index posted its fourth straight weekly loss last week. In addition, the S&P 500 also rose by more than 1.6%.

Video Transcript

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SEANA SMITH: Welcome back to "The Final Round" here on Yahoo Finance. I'm Seana Smith. We have stocks getting a boost today on the heels of Friday's rally into the close. Right now we have the Dow up just around 400 points. So about 100 or so points off the highs of the day. S&P up just about 1 and 1/2%, and the NASDAQ up 1.8%. When we take a look at the buying action today sector-wise, we're seeing gains across all 11 sectors. Leadership there being energy and financials. It's been a bit of a long time since we saw those two sectors leading the way.

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And that does it for the trading day today. Again, all three of the major averages well in the green. And taking a look at the buying today, was pretty broad-based. When you take a look at the Dow, only a handful of those stocks in the index in the red today. Boeing, by far the winner in the Dow, up just around 6%. And we're also seeing gains from Dell, Inc. and JP Morgan. Those three stocks are the leaders here in the Dow today. The S&P 500 looks like it's going to close just shy of 3,350, but back above 3,300. And the NASDAQ above 11,100, reclaiming that level here today with gains of just about 1.9%.

Taking a look at the sector action, like I said before, all 11 of the sectors are in the green today. Energy, financials and industrials among the big outperformers. Small caps, when you take a look at the Russell 2000, a huge outperformer today. Russell 2000 up just around 2 and 1/2%. And I want to mention that because the excessive fear gauge index volatility.

We've been keeping a close eye on that. Still above its 50-day moving average. Today just above 26, but that's well below 30, where it hit last week. So I want to bring in my co-host for the next 60 minutes, Myles Udland. And Myles, when you take a look at today's action, we saw a rally on Friday, rally continuing today. What stands out to you from today's gains?

MYLES UDLAND: Well, unlike Jared Blikre, I don't have the entire Wi-Fi interactive screen, so I will feel free to steal what I know is one of his main talking points, which is the S&P 500 today getting right back to the 50-day moving average, but not blowing through that level. And I believe the close, at least on my glance, was pretty much at the number. So we still have the S&P kind of right between the 50 and the 200-day.

Now again at the high end of that range, but we have discussed and we picked up on this theme last week, the idea of the market looking for direction between these two major moving averages. One is an interim or sort of a medium-term indicator, one a long-term indicator. No one doubts that the market right now still kind of has a broad direction up and to the right. But how forceful the market is going to be on any one session or for any given period of time in continuing these gains, has been called into question by what we saw in September.

So that's kind of the technical setup. The fundamental side, which brought it up several times, because it was just very surprising to me to see consensus come around to this idea within the last week or so that what September's correction was really about, is pricing in election scenarios. And sure, I mean, it makes sense. The election is only five weeks away. If they're not going to price in the election now, then when would markets price in the election?

But I think there are certainly some questions about how much that will carry over into October, the end of quarters, the end of months is always a busy time for trading. We are hitting both of those on Wednesday. And so again, I think that the market had a correction in September. We're still in September. That's not going to go away over the next couple of sessions.

But with earnings season, the election and a seasonally strong period for markets in the fourth quarter, I think we could have a very, very interesting end of the year, depending least on how much we continue to convince ourselves this is really being driven by politics or not.

SEANA SMITH: Well, Jared, I've lot to get your thoughts on this just in terms of some of those technical levels that Myles started off with there. When we take a look at the S&P, we know that there's a lot of uncertainty here in the markets, And just two days from now, we're going to get the end of the month, the end of the quarter. What are some of those levels that you're watching and then the potential volatility here over the next couple of days?

JARED BLIKRE: Well, I'm not necessarily expecting volatility, unless we get dragged into a big selloff for some reason. Can happen, but I don't think that's most likely scenario. I find today's price action pretty constructive, because we had this downward, this negative trend line. Let's see, this is a three-month chart of the S&P 500 with a 50-day moving average on it. And as Myles said, closed right at the 50-day here and above this negative trend line.

So this is the first step into getting back in to the record highs. And we still have to clear this 3,410 area. I would say that provides more potential resistance. But it's a good start to the week here, especially considering that when we rally on Friday afternoons, as we did last Friday afternoon, a lot of times we see some weakness Monday. So did not happen.

But another thing I'd like to say is, the stock market doesn't really get down to business and start the week until Tuesday morning at about 10:00 AM. So we still got some things to prove here. And as far as a month end goes, I've seen a lot of numbers floated out there. It looks like now there's going to be a buy side imbalance for equities of at least $10, $20 billion. Initially it had been up to $50 billion in selling, so that's kind of reversed here.

And then the election year seasonality really favors the bears here. That does account for about one third of any stock or any index movement that would be seasonality. So that's a potential headwind as well. But I kind of buy into the narrative that a lot of the weakness in September was simply repricing election year risk. And we got the debates tomorrow night. I think it actually could be a market mover. Usually not, but given the uniqueness of this year, it's going to be something to look out for.

SEANA SMITH: Yeah, Jared, we've heard from a number of Wall Street insiders, market watchers today, saying that the Trump tax story wasn't necessarily a market mover, but the big story here in terms of the election this week, could be the debate tomorrow night. So of course, that's something to keep in mind tomorrow night and then into Wednesday morning.