Stocks rose on Monday, building on a record-setting week, as positive developments on coronavirus treatments and vaccines drove the bullish sentiment.
The Dow Jones Industrial Average jumped 241 points, or 0.9%. The S&P 500 climbed 0.6% and hit an all-time high. The Nasdaq Composite advanced 0.2% and also reached a record.
Apple shares rose 1% to lead other tech-related names higher. Facebook climbed 1.1% and Amazon advanced 0.2% along with Alphabet.
Shares of airlines and cruise operators gained amid the coronavirus treatment developments. United Airlines rose by more than 9% along with American. Delta gained 8.5%. Carnival gained 9.3%. Norwegian Cruise Line and Royal Caribbean advanced 7.3% and 4%, respectively.
Monday’s moves come as the number of new coronavirus cases continues to decline in the U.S. Since spiking to more than 64,000 cases earlier this month, the number of new daily infections in the U.S. has not topped 49,000, according to Johns Hopkins University. On Sunday, there were less than 37,000 new confirmed cases, the data showed.
“I think something interesting may evolve in the weeks and months ahead,” said Tom Lee, head of research at Fundstrat Global Advisors, in a note. “I think it is entirely possible that USA COVID-19 cases crash to sub-10,000 in September.”
“The US is soon becoming one of the safest places in the World. And if this is true, capital will also want to seek the US,” which means “stocks rise further,” Lee said.
Apple CEO Tim Cook delivers the keynote address during the 2020 Apple Worldwide Developers Conference (WWDC) at Steve Jobs Theater in Cupertino, California, June 22, 2020.
Brooks Kraft | Apple, Inc. | via Reuters
On Sunday, the U.S. Food and Drug Administration issued an emergency use authorization of convalescent plasma for hospitalized Covid-19 patients, a treatment that uses blood plasma donated by people who’ve recovered from the virus.
President Donald Trump said at a news conference Sunday that the plasma treatment cuts the mortality rate by 35%.
The Trump administration is also considering fast-tracking an experimental coronavirus vaccine developed in the U.K. for use in the United States ahead of the nation’s upcoming presidential election, according to a Financial Times report.
Wall Street was coming off a banner week as a seemingly unstoppable rally in major technology shares pushed the S&P 500 to levels above its previous record set before the pandemic. The broad equity benchmark posted its fourth straight positive week and closed at a fresh record on Friday.
Those tech gains were largely driven by Apple ahead of its 4-for-1 stock split. Apple’s massive gains this year — along with those of Facebook, Amazon, Netflix, Alphabet and Microsoft — have raised concerns about how sustainable this market rally is.
Bruce Bittles, chief investment strategist at Baird, thinks investors need to be careful as only a small group of stocks is contributing to the market’s rally.
“The S&P 500 and the NASDAQ hit new record highs last week but more stocks were down than up. Typically, the opposite should be true,” Bittles wrote in a note. “In a healthy rising market, the majority of stocks, groups and sectors should be rising along with the averages. On Friday, deteriorating market breadth was exhibited by roughly 200 stocks in the S&P 500 that were up and almost 300 were down.”
But value investor Joel Greenblatt thinks the market “froth” isn’t coming from Big Tech.
“I think some of the stocks that people worry about — whether it’s Apple, Microsoft, Google, Facebook, Amazon, all those leading companies — they really just sell at a slight premium to the market,” Greenblatt, co-chief investment officer at Gotham Funds, told CNBC’s “Squawk Box” on Monday.
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Stocks rose, building on a record-setting week, as positive developments on coronavirus treatments and vaccines drove the bullish sentiment.