Wall Street ends higher with boost from technology stocks

Investors assessed stimulus-fuelled recovery hopes against an increase in coronavirus infections.
Investors assessed stimulus-fuelled recovery hopes against an increase in coronavirus infections.PHOTO: AFP

NEW YORK (REUTERS) - Wall Street’s three major indexes closed higher on Monday (June 22) 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.

Nasdaq registered its fourth record closing high this month with the biggest boosts from Microsoft, Apple and Amazon.com.

The World Health Organisation reported a record rise in global coronavirus cases on Sunday, driving demand for perceived safe havens including gold and longer-term US Treasuries.

While New York City on Monday celebrated the lifting of many coronavirus restrictions, a dozen states in the US 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 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 US House of Representatives Democrats on Thursday unveiled a $1.5 trillion infrastructure bill in the same week that reports emerged of preparations by the Trump administration for an 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.

US President Donald Trump said on Monday that he supported the idea of giving Americans a second round of financial aid because of the virus.

The Dow Jones Industrial Average rose 153.5 points, or 0.59%, to 26,024.96, the S&P 500 gained 20.12 points, or 0.65%, to 3,117.86 and the Nasdaq Composite added 110.35 points, or 1.11%, to 10,056.48.

Of the S&P’s 11 major sectors, technology was leading the pack. However the next biggest gainer was the defensive utilities sector.

 
 
 
 

The market took a step back on Friday after Apple Inc’s move to temporarily shut some US stores again underscored concerns of a delay in the recovery.

But Apple shares climbed on Monday and trading at record highs as the company announced new products at its annual conference for software developers.

Travel-related stocks were some of the weakest as those companies have been hit hard in the past by lockdowns.

The S&P 1500 airlines index dropped 1.3%, while shares of cruise operators Norwegian Cruise Line and Royal Caribbean Cruises dropped 6%.

US-based meat processor Tyson Inc slipped 2.8% as China’s customs authority suspended imports of poultry products from a plant owned by the company that had been hit by the coronavirus.

American Airlines Group Inc fell almost 7% as it planned to secure $3.5 billion in new financing by selling shares and convertible senior notes to boost liquidity.

Virgin Galactic Holdings Inc soared just under 16% as it signed up with NASA to develop a program to promote private missions to the International Space Station.

Advancing issues outnumbered declining ones on the NYSE by a 1.18-to-1 ratio; on Nasdaq, a 1.19-to-1 ratio favored advancers.

The S&P 500 posted 14 new 52-week highs and no new lows; the Nasdaq Composite recorded 120 new highs and nine new lows.

On US exchanges 10.66 billion shares changed hands compared with the 13.29 billion average for the last 20 sessions.