By Joy Wiltermuth and Sunny Oh
Getty Images
U.S. stocks finished sharply higher Monday, with the Nasdaq scoring a record close, as Wall Street followed surging Chinese equity benchmarks to their best levels in at least two years.
Monday’s upbeat market action contrasted with a further spike in U.S. coronavirus cases and a resurgence of business restrictions by state and local authorities struggling to contain the viral outbreak.
How did benchmarks perform?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.17% gained 459.67 points, or 1.8%, to end at 26,287.03. The S&P 500 /zigman2/quotes/210599714/realtime SPX +0.06% climbed 49.71 points, or 1.6%, ending at 3,179.72 and booking five straight sessions of gains, its longest streak since Dec. 17, according to Dow Jones Market Data. The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP -0.87% surged 226.02 points, or 2.2%, to 10,433.65, scoring a fresh closing record.
The Dow finished last week’s holiday-shortened period up 3.3%, the S&P 500 put in a weekly gain of 4%, while the Nasdaq returned 4.6%, after closing at a record on Thursday.
The U.S. market was closed on Friday in observance of the Independence Day holiday.
What drove the market?
U.S. stocks ended up sharply Monday, led by shares of financial companies and record-setting technology shares as Wall Street followed Chinese equity markets higher.
Goldman Sachs Group Inc . /zigman2/quotes/209237603/composite GS +1.97% share advanced 5.1%, leading the blue-chip Dow higher, along with Boeing Co . /zigman2/quotes/208579720/composite BA -1.27% and Walgreens Boots Alliance In c. /zigman2/quotes/203410933/composite WBA +1.54% .
But Monday’s gains also came with growing doubts about the ability of the U.S. to contain the viral outbreak and its economic fallout, after COVID-19 cases climbed across the U.S. over the Fourth of July weekend.
Coronavirus update : U.S. cases reach 2.9 million and death toll tops 130K, as 38 states see cases on the climb
“This is potentially setting the U.S. on a very different activity restart path than most Western countries and much of Asia,” warned a BlackRock Investment Institute team led by Mike Pyle, global chief investment strategist, in a note Monday.
The BlackRock team lauded the coordinated U.S. fiscal and monetary response in March, but they also warned that the “resurgence of the virus is taking place just as Congress and the White House face a critical decision over whether to extend a number of crisis measures, including additional federal unemployment benefits set to expire at the end of July.”
Kristina Hooper, Invesco’s chief global market strategist, also warned that recent improvements on the U.S. jobless front and surprisingly better economic data could be derailed in the coming months if policy makers become complacent in their response to rising COVID-19 infections.
“In my view, more fiscal stimulus is clearly needed as so much of the stimulus already enacted is very temporary in nature,” Hooper wrote in a client note. “In addition, we are seeing a growing number of companies announce layoffs and file for bankruptcies while others are voluntarily re-closing stores.”
In U.S. economic data, the Institute for Supply Management reported its index of service sector companies jumped to 57.1 in June from 45.4 in May, marking the single-biggest increase since the survey was created in 1997. MarketWatch-polled economists expected to see a reading of 51. Any number above 50 represents an expansion in economic activity.
Add to watchlist
DJIA
Add to watchlist
WBA
