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Stocks Close On Strong Note Despite Surge In New Coronavirus Cases

wallstreet july25 29jun20 lt

U.S. stocks ended on a buoyant note on Monday despite several states in the country reporting sharp spikes in new coronavirus cases over the weekend.

Investors surprisingly shrugged off the report about the spread of the coronavirus, and kept picking up stocks, betting on hopes the central bank will come with more stimulus sometime in the near futures.

The major averages all ended with handsome gains. The Dow ended up 580.25 points or 2.3% at 15595.80, the best closing level in nearly four weeks. The S&P 500 climbed 1.5% to 3,053.24, while the Nasdaq advanced 1.2% to 9,874.15.

Boeing (BA) shares soared more than 14% after the company got permission to test flights using the 737 Max. The Federal Aviation Authority has been reviewing the safety fixes done on the aircraft. The Boeing 737 Max flights were grounded worldwide on safety concerns and deliveries were suspended after two fatal accidents that killed 346 people. It is expected that the airworthiness would be revoked on satisfactory test flights.

General Electric (GE) shares jumped 4.5%, while Verizon (VZ) and Goldman Sachs (GS) both gained about 2.9%. Apple Inc. (APPL), Caterpillar (CAT), Walt Disney (DIS), Procter & Gamble (PG) and Nike (NKE) moved up 2.3 to 2.5%. Facebook (FB) also closed notably higher.

In economic news, pending home sales in the U.S. fell 5.1% over a year earlier in May of 2020, following a record 33.8% plunge in the previous month due to the coronavirus crisis.

Pending home sales for the month of May rose 44.3%, after falling 21.8% a month earlier. Sales were expected to rise by 12% in the month.

In virus news, many U.S. states are reportedly returning to previous restrictions following a surge in new coronavirus cases in the country last week. As many as 36 states have reported large number of new cases in the past week.

Infection rates remain on the rise in countries such as Brazil and India. Australia today reported 78 new coronavirus cases, the highest single-day rise since April. South Korea has reported new cases today.

The resurgence of the coronavirus outbreak and concerns that the Covid-19 has been badly underestimated curbed optimism for a swift recovery of the global economy.

A report from Johns Hopkins University said the number of coronavirus cases worldwide has surpassed 10 million, while the global death toll from the pandemic rose to more than 500,000.

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