U.S. markets came out roaring on the first day back after the Labor Day weekend, as investors shook off last week’s 3% loss on the major averages to put fresh money into stocks.
All was quiet on the Eastern front, as Chinese markets reopened after a four-day holiday weekend and finished 3% higher on the day. In August, Chinese foreign exchange reserves had their biggest monthly decline on record in an attempt to stop the yuan from further decline and to stabilize financial markets.
The Dow Jones Industrial Average soared 390 points, or 2.4%, while the S&P 500 Index gained 2.5% and the Nasdaq Composite went up 2.7%. All major sectors were higher today, with materials, technology and industrial stocks fairing especially well.
Freeport-McMoRan Inc (NYSE:FCX) and Charles Schwab Corp (NYSE:SCHW) both benefited from positive comments from analysts, while General Electric (NYSE:GE) rounded out three of today’s best stocks. Here’s why:
Freeport-McMoRan Inc (FCX)
FCX stock soared 7% higher today after rumors circulated that the mining company is now discussing strategy with JPMorgan Chase & Co. (NYSE:JPM), after activist investor Carl Icahn took an 8.5% stake in Freeport last month.
Recently, FCX announced plans to reduce its workforce in the U.S. and lower its 2016 capex budget by $1.6 billion … but Icahn is looking for more. Icahn may be seeking representation on the board, intending to hold discussions with management about a number of cost-cutting measures.
The price of copper also had an effect on FCX stock, as did the broad effect of hope for Chinese stimulus.
Charles Schwab Corp (SCHW)
SCHW stock got a lift today courtesy of an upgrade from “neutral” to “overweight” at JP Morgan, as well as an increase in price target to $39 from $35.
SCHW was upgraded after falling 16% from the beginning of August, and JPM said it sees good value in SCHW stock going forward.
After rising more than 6% today, SCHW stock is sitting just above its 200-day moving average.
General Electric (GE)
GE stock’s future was brighter today after winning European Union approval for its $13.9 billion acquisition of the energy portion of French firm Alstom SA, along with selling some of Alstom’s turbine assets to rival company Ansaldo Energia.
By selling the turbine assets to Ansaldo, GE is reducing fears of monopolistic practices leading to increased electricity costs in Europe.
GE told investors in May that it expects to reduce expenses by $3 billion over the next five years as a result of this merger, which is expected to close before the end of the year.
GE was up 4% on the day.
As of this writing, Ethan Roberts did not hold a position in any of the aforementioned securities.
