Buoyed by the promise of a massive stimulus package to offset the economic repercussions of COVID-19, the Standard & Poor's 500 index rallied more than 10%, making last week one of the best on Wall Street in nearly 90 years.
The benchmark average closed at 2,541.47, up from 2,304.92 last Friday, the first weekly gain since the COVID-19 pandemic undermined investor confidence at the end of February.
The week kicked off with another three-year low in the S&P on Monday as Washington's inability to agree on a rescue package weighed on Wall Street and overshadowed the Fed's massive liquidity injection. The energy sector continued to lose ground amid oversupply pressures, keeping Brent futures near its four-year low, but the sector still rose 9.6% for the week.
As the details of a rescue package emerged, stocks moved higher with every sector of the S&P closing in the green.
With the energy sector against the ropes, Wall Street analysts are anticipating a wave of mergers and acquisitions to sweep through the utilities sector, which was up 16.4% on the week. CenterPoint (CNP) and PPL (PPL) were among the companies seen as the most likely candidates for a takeover. CNP outperformed other names in the sector with a 31% gain from last week.
Boeing (BA) shares more than doubled in price this week and was instrumental in a 15% gain for the industrial sector. The aircraft manufacturer -- plagued by setbacks to its flagship aircraft -- was catapulted higher by Goldman's upgrade to buy, as well as CEO David Calhoun's assurances that the company does not need government aid. Calhoun told investors that the company is "in pretty decent shape" and would not need the government to take an equity stake.
The airlines had a good week as well, emerging as the main beneficiary of government aid. Shares of United Airlines were up 34%, while Delta shares gained 38%.
Among real estate stocks, Ventas (VTR), which operates senior housing facilities, came out ahead with a 41% gain from last week despite a recent downgrade from Fitch to negative. The stock has fallen by 77% in the past month but was ripe for bottom-fishing after Raymond James issued an upgrade to strong buy from market perform on Wednesday.
While all sectors participated in this week's impressive rebound, some sectors underperformed. The consumer staples sector gained a comparatively anemic 6.5% as outsized-sized gains in Coty (COTY), up 41%, and Sysco (SYY), gaining 43%, were offset by an 8% loss in shares of Kroger (KR) along with heavy profit-taking pressure on Clorox (CLX), down 2.4%, as investors looked for speculative plays elsewhere.
The communication services sector advanced by just 5.5% thanks to a 39% gain this week in Live Nation (LYV) and an 18% gain for Charter Communications (CHTR).
Despite the widespread cancellation of sporting and entertainment events across the globe, Live Nation was upgraded at Citigroup to neutral from sell as the firm advised investors that not only are the adverse impacts from event cancellations already priced into the stock price, but the potential for a quick recovery in the event sector was likely behind recent insider buying.
Gains in the sector were mitigated by selling pressure on CenturyLink (CTL) and News Corp (NWSA).
CenturyLink was given a sell rating by Citigroup this week as "revenue erosion and future fiber investment needs" may weigh on the stock in the event of a sustained downturn.