Wall Street’s main indexes inched up on Monday following a sharp selloff last week, as investors clung to hopes of a stimulus-backed economic rebound even as coronavirus cases surged, while a jump in Boeing shares boosted the blue-chip Dow.
The planemaker rose 7.3 per cent after the Federal Aviation Administration confirmed on Sunday it had approved key certification test flights for the grounded 737 MAX that could begin as soon as Monday.
Of the 11 major S&P 500 sub-indexes, only information technology was in the red. The industrial and materials sectors led gains with a jump of more than 1.5 per cent each.
“The market is taking a tremendous amount of comfort in the fact that as long as we contain the virus, the economy is going to recover very fast and you’re going to see cyclical stocks start to rally again,” said Thomas Hayes, managing member at Great Hill Capital LLC in New York.
The benchmark S&P 500 has rebounded since a coronavirus-driven crash in March, up about 16 per cent since April and set for its best quarter since 1998, on a raft of U.S. fiscal and monetary stimulus as well as improving economic data.
Data on Monday showed contracts to buy previously owned homes rebounded by the most on record in May, suggesting the housing market was starting to turn around. Later this week, investors will focus on employment, consumer confidence and manufacturing data for June.
Still, volatility has edged up since late last week as the number of COVID-19 cases spiked, with Wall Street‘s fear gauge now hovering near two-week highs.
A Reuters tally showed the death toll from the respiratory illness topped half a million on Sunday.
The BlackRock Investment Institute downgraded U.S. equities to “neutral”, citing risks of fading fiscal stimulus, an extended epidemic as well as renewed China-U.S. tensions.
At 10:37 a.m. ET, the Dow Jones Industrial Average was up 344.20 points, or 1.38 per cent, at 25,359.75, the S&P 500 was up 22.65 points, or 0.75 per cent, at 3,031.70, and the Nasdaq Composite was up 34.29 points, or 0.35 per cent, at 9,791.51.
Gilead Sciences Inc rose 1.8 per cent as it priced its COVID-19 drug candidate remdesivir at $2,340 for a five-day treatment in the United States and some other developed countries.
Coty Inc jumped 10.8 per cent after a report said it agreed to buy a 20 per cent stake in reality TV star Kim Kardashian West’s makeup brand KKW for $200 million.
Facebook Inc extended declines from Friday as a report said PepsiCo Inc was set to join a growing number of companies pulling ad dollars from the social media platform.
Advancing issues outnumbered decliners more than 3-to-1 on the NYSE and more than 2-to-1 on the Nasdaq.
The S&P index recorded no new 52-week high or low, while the Nasdaq recorded 35 new highs and 14 new lows.