Stocks moved mostly higher over the course of the trading day on Monday after showing a lack of direction early in the session. The tech-heavy Nasdaq closed higher for the seventh straight session, reaching a new record closing high.
The major averages all finished the day firmly in positive territory. While the Nasdaq jumped 110.35 points or 1.1 percent to 10,056.47, the Dow climbed 153.50 points or 0.6 percent to 26,024.96 and the S&P 500 advanced 20.12 points or 0.7 percent to 3,117.86.
The strength that emerged on Wall Street came as traders continued to express optimism the U.S. economy will quickly recover from the coronavirus-induced setback.
Recent retail sales and employment data far exceeded estimates, helping reinforce hopes of a V-shaped recovery even as most economists urge caution.
Traders shrugged off a report from the National Association of Realtors showing a continued nosedive in existing home sales in May, as the group’s chief economist was confident sales would rebound in the coming months.
NAR said existing home sales plunged by 9.7 percent to an annual rate of 3.91 million in May after plummeting by 17.8 percent to a rate of 4.33 million in April. Economists had expected existing home sales to slump by 4.8 percent to a rate of 4.12 million.
“Sales completed in May reflect contract signings in March and April – during the strictest times of the pandemic lockdown and hence the cyclical low point,” said Lawrence Yun, NAR’s chief economist.
He added, “Home sales will surely rise in the upcoming months with the economy reopening, and could even surpass one-year-ago figures in the second half of the year.”
The economic optimism also overshadowed concerns about rising coronavirus cases in the U.S. and other parts of the world.
According to the World Health Organization, more than 183,000 new coronavirus infections were reported globally on Sunday, the biggest single-day increase since the outbreak began.
Brazil has become a major coronavirus hotspot in recent weeks and led the spike in new infections with 54,771 new cases.
The U.S. was next with 36,617 new cases as states in the South, West and Midwest see surges in new infections following recent reopening.
During his speech in Tulsa, Oklahoma, on Saturday, President Donald Trump blamed the jump in new cases on increased testing and suggested he would like to see testing slowed down.
Gold stocks showed a substantial move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 4 percent.
The rally by gold stocks came amid another notable increase by the price of precious metal, with gold for August delivery surging up $13.40 to $1,766.40 an ounce.
Considerable strength was also visible among software stocks, as reflected by the 2.5 percent jump by the Dow Jones U.S. Software Index. The index ended the session at a new record closing high.
Utilities and retail stocks also saw notable strength on the day, while tobacco stocks showed a significant move to the downside.
In overseas trading, stock markets across the Asia-Pacific region ended flat to slightly lower during trading on Monday. Japan’s Nikkei 225 Index dipped by 0.2 percent, while China’s Shanghai Composite Index edged down by 0.1 percent.
Meanwhile, the major European markets moved to the downside over the course of the session. While the U.K.’s FTSE 100 Index slid by 0.8 percent, the French CAC 40 Index and the German DAX Index both fell by 0.6 percent.
In the bond market, treasuries pulled back near the unchanged line after seeing modest strength in early trading. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, crept up by less than a basis point to 0.704 percent.
The latest news on the coronavirus front may attract attention on Tuesday, while traders are also likely to keep an eye on a Commerce Department report on new home sales.
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