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Aug. 24, 2020, 4:34 p.m. EDT

Dow ends above 28,000 for first time in 6 months, S&P 500 and Nasdaq clinch new records on coronavirus treatment hopes

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By Joy Wiltermuth and Sunny Oh


The S&P 500 and Nasdaq Composite clinched fresh closing and intraday records on Monday, as hopes for a potential COVID-19 treatment bolstered trading for more growth-sensitive sectors that have lagged the rest of the market.

What did major benchmarks fare?

The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.10% surged 378.13 points, or 1.4%, to end at 28,308.46, finishing above 28,000 for the first time in six months and only 4.2% away from its Feb. 12 record closing high. The S&P 500 /zigman2/quotes/210599714/realtime SPX -1.04% gained 34.12 points, or 1%, closing at a record 3,431.28, near its fresh intraday record. The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -2.55% rose 67.92 points, or 0.6%, ending at a record 11,379.72, following its intraday all-time high at 11,462,05.

The S&P 500 on Friday drifted higher by 0.3% in light volume to end at a record 3,397.16, marking a 0.7% weekly advance. The Dow rose 190.60 points, or 0.7%, on Friday to end the week with a gain of less than one point at 27,930.33. The tech-heavy Nasdaq Composite  logged a 2.7% weekly rise, finishing Friday at 11,311.80, its 36th record finish of 2020.

What drove the market?

Equity investors snapped up a broad range of U.S. stocks on Monday, from airlines to technology darlings, a day after the Food and Drug Administration said it approved the use of convalescent plasma, the antibody-rich component of blood taken from recovered COVID-19 patients, as a treatment for serious coronavirus cases.

“It does seem to be related to potentially favorable news over the weekend regarding treatments, and general optimism about the possibility of a coronavirus vaccine,” John Carey, Amundi Pioneer’s director of U.S. equity Income, told MarketWatch. “It’s a broader-based market advance, with both cyclicals and growth stocks moving upward.”

The World Health Organization on Monday warned that the plasma therapy hailed by President Donald Trump Sunday still is unproven and cautioned that the there is “very low evidence” that it is safe and effective. Medical experts said the potential plasma treatment may provide benefits to those battling the disease, while questions remain about when it should be administered and dosage.

AstraZeneca /zigman2/quotes/203048482/delayed UK:AZN -1.58%   /zigman2/quotes/200304487/composite AZN +1.06% shares rose 1.9%, even after the drugmaker denied talks with U.S. government about emergency use authorization of its coronavirus vaccine, a day after the Financial Times reported that Trump may order the FDA to grant the same type of approval for its vaccine, which is being developed by University of Oxford researchers.

The new bout of optimism helped beaten-down cyclical sectors, including shares of energy and industrials, areas that would benefit from a faster economic rebound. Energy shares led gains on the Nasdaq and S&P 500 Monday.

“There is a rationale for some of these cyclical stocks to do better on the hopes or expectations of vaccines being developed. But I do think it’s still a bumpy road” for the economic recovery, said Yung-Yu Ma, chief investment strategist at BMO Wealth Management, in an interview.

Read: Are stock market investors overpricing or underpricing a coronavirus vaccine?

The S&P 500 returned to record territory last week, erasing a nearly 34% plunge that took the U.S. benchmark from a record Feb. 19 close to its March 23 low, in a rally driven largely by shares of big tech companies that have seen their businesses benefit from the pandemic, while shares of companies whose performance is tied more closely to the economic cycle have continued to lag despite some recent stretches of outperformance.

Related : Trees don’t grow to the sky: tech stocks can’t outperform forever, BCA Research argues

Investors also are looking forward to hearing dozens of central bankers speak later in the week during the Kansas City Federal Reserve Bank’s annual symposium. The event, typically held in Jackson Hole, Wyo., will be conducted via webcast this year. Fed Chairman Jerome Powell is slated to speak Thursday on how the central bank plans to achieve its twin goals of stable prices and maximum employment once the coronavirus pandemic has ended.

“I believe Powell may go so far as to announce a new inflation targeting policy, or at least hint at it,” wrote Kristina Hooper, Invesco’s chief global market strategist, in a note Monday. “We could also hear central bankers from around the world discuss how they would respond monetarily to trade policy, which I believe is worth addressing given the current state of trade tensions.”

US : Dow Jones Global
-34.94 -0.10%
Volume: 370.04M
May 10, 2021 5:40p
-44.17 -1.04%
Volume: 2.32B
May 10, 2021 5:40p
US : Nasdaq
-350.38 -2.55%
Volume: 4.37M
May 10, 2021 5:16p
UK : U.K.: London
7,595.00 p
-122.00 -1.58%
Volume: 585,916
May 11, 2021 1:36p
P/E Ratio
Dividend Yield
Market Cap
£101.31 billion
Rev. per Employee
US : U.S.: Nasdaq
$ 54.38
+0.57 +1.06%
Volume: 8.36M
May 10, 2021 4:00p
P/E Ratio
Dividend Yield
Market Cap
$141.94 billion
Rev. per Employee
1 2
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