FILE PHOTO: Traders wear masks as they work on the floor of the New York Stock Exchange as the outbreak of the coronavirus disease (COVID-19) continues in the Manhattan borough of New York, U.S., May 28, 2020. REUTERS/Lucas Jackson
June 29, 2020
By Chuck Mikolajczak
(Reuters) – Wall Street climbed on Monday and the S&P 500 moved closer to clinching its biggest quarterly gain since 1998 as investors clung to hopes of a stimulus-backed economic rebound, while Boeing shares shot higher to help boost the blue-chip Dow.
A spike in virus infections in Southern and Western states last week sent the S&P 500 down nearly 3%, but the threat of a deeper-than-feared recession has led investors to expect more stimulus measures from the Federal Reserve or Congress.
But the sting of rising infections was blunted by the pricing of the antiviral drug remdesivir, which has been shown to alter the course of COVID-19, by Gilead Sciences
“The market is so antsy and edgy about every headline – last week the world was falling apart because of an explosion of cases and then today Gilead is going to charge for a remdesivir treatment so it’s all good,” said Ken Polcari, chief market strategist at SlateStone Wealth LLC in Jupiter, Florida.
“The Boeing news was good in terms of them starting to fly again so that is a positive for sure for a big industrial name.”
The Dow Jones Industrial Average <.DJI> rose 479.07 points, or 1.92%, to 25,494.62, the S&P 500 <.SPX> gained 35.93 points, or 1.19%, to 3,044.98 and the Nasdaq Composite <.IXIC> added 89.44 points, or 0.92%, to 9,846.66.
Each of the 11 major S&P sectors was in positive territory, with industrial <.SPLRCI> and material <.SPLRCM> stocks leading gains.
The benchmark S&P 500 <.SPX> has rebounded about 36% from its March 23 closing low. Monday’s gains pushed the index above its 200-day moving average, a technical support level it had fallen through with last week’s decline.
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 and consumer confidence data for June.
Still, Wall Street was looking for more stimulus measures to buttress the economy. Analysts at Morgan Stanley said a further injection of cash was critical to the bank’s thesis for a “V”-shaped U.S. economic recovery.
The BlackRock Investment Institute downgraded U.S. equities to “neutral,” citing risks of fading fiscal stimulus, an extended epidemic as well as renewed U.S.-China trade tensions.
Although a $3 trillion aid bill was passed by the House of Representatives in May, the Republican-controlled Senate has not taken up the package and lawmakers are not expected to move toward another coronavirus bill until sometime in July.
Advancing issues outnumbered declining ones on the NYSE by a 3.00-to-1 ratio; on Nasdaq, a 2.01-to-1 ratio favored advancers.
The S&P 500 posted 1 new 52-week high and no new lows; the Nasdaq Composite recorded 50 new highs and 16 new lows.
(Reporting by Chuck Mikolajczak in New York; Editing by Matthew Lewis)