Wall Street’s three major indexes closed higher on Monday with the biggest gains in technology stocks as investors focused on the potential for more government stimulus measures even as they worried about an increase in coronavirus cases in the United States and other countries. The TSX also eke out a gain, propelled mostly by a jump in materials stocks as the price of gold rose.
Thanks to a jump in shares of Apple, the Nasdaq closed at an all-time high.
The World Health Organization reported a record rise in global coronavirus cases on Sunday, driving demand for perceived safe havens including gold and longer-term U.S. Treasuries.
While New York City on Monday celebrated the lifting of many coronavirus restrictions, a dozen states in the U.S. South and Southwest reported record increases in new cases with 10% to 20% of people testing positive in some.
However, White House economic adviser Larry Kudlow told CNBC earlier in the day that there was no second wave of the pandemic and that it is unlikely there will be widespread shutdowns across the country.
Investors were also clinging to hopes for more government stimulus after U.S. House of Representatives Democrats on Thursday unveiled a US$1.5-trillion infrastructure bill in the same week that reports emerged of preparations by the Trump administration for a infrastructure stimulus plan.
“The good news from last week is dominating the bad news from today, which is the increase in COVID cases,” said Nela Richardson, investment strategist at Edward Jones, who cautioned that government infrastructure spending plans have failed to become reality several times in the recent past.
Richardson said rising virus case numbers spurred a rotation out of sectors hit hardest by coronavirus’ economic impacts into more resilient sectors such as technology.
Unofficially, the Dow Jones Industrial Average rose 151.58 points, or 0.59%, to 26,023.04, the S&P 500 gained 20.42 points, or 0.66%, to 3,118.16 and the Nasdaq Composite added 110.35 points, or 1.11%, to 10,056.48.
Investors were also looking past the current quarter and into 2021, when earnings are expected to start improving, according to Sam Stovall, chief investment strategist at CFRA.
Analysts expect a 42.7% drop in earnings per share for the second quarter, according to estimates gathered by Refinitiv.
The market took a step back on Friday after Apple Inc’s move to temporarily shut some U.S. stores again underscored concerns of a delay in the recovery.
But Apple shares climbed on Monday, trading at record highs as the company announced new products at its annual conference for software developers. The stock closed up 2.6% at US$358.87.
In Toronto, the S&P/TSX Composite Index gained 42.69 points, or 0.28%, at 15,516.90, with the materials sector leading the charge with a 2.81% gain. Performance was uneven, with several sectors seeing losses for the day, including a 0.30% drop in financials.
Canada’s tech star, Shopify, gained 1.68% to a record high Cdn$1,225. That further cements its status as the country’s most valued stock, with a market cap now of Cdn$146.256-billion versus $131.068-billion for Royal Bank of Canada.
Read more: Stocks that saw action Monday - and why
Reuters, Globe staff
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