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Coronavirus Treatment News May Lead To Continued Strength On Wall Street

The major U.S. index futures are currently pointing to a higher opening on Monday, with the Nasdaq and the S&P 500 poised to reach new record highs.

Early buying interest is likely to be generated in reaction to upbeat news on the coronavirus front, with companies that have been hit hardest by the pandemic, like cruise operators and airlines, seeing notable pre-market strength.

The Food and Drug Administration announced Sunday that it has issued an emergency use authorization for investigational convalescent plasma for the treatment of COVID-19 in hospitalized patients.

The FDA concluded convalescent plasma may be effective in treating COVID-19 and that the known and potential benefits of the product outweigh the known and potential risks.

"I am committed to releasing safe and potentially helpful treatments for COVID-19 as quickly as possible in order to save lives, said FDA Commissioner Dr. Stephen Hahn.

He added, "The data from studies conducted this year shows that plasma from patients who've recovered from COVID-19 has the potential to help treat those who are suffering from the effects of getting this terrible virus."

Adding to the positive sentiment, a report from the Financial Times said the Trump administration is considering fast-tracking an experimental coronavirus vaccine from the U.K. for use in America ahead of the presidential election.

Citing three people briefed on the plan, the FT said one option being explored to speed up the availability of a vaccine would involve the FDA awarding emergency use authorization in October to a vaccine being developed in a partnership between AstraZeneca (AZN) and Oxford University.

Shares of Apple (AAPL) may also help lead a continued rally by tech stocks, as today marks the record date for the tech giant's recently announced 4-for-1 stock split.

After ending the previous session mostly higher, stocks saw further upside over the course of the trading day on Friday. The continued upward move on the day lifted the Nasdaq and the S&P 500 to new record closing highs.

The major averages all finished the day firmly in positive territory. The Dow advanced 190.60 points or 0.7 percent to 27,930.33, the Nasdaq climbed 46.85 points or 0.4 percent to 11,311.80 and the S&P 500 rose 11.65 points or 0.3 percent to 3,397.16.

For the week, the tech-heavy Nasdaq soared by 2.7 percent and the S&P 500 advanced by 0.7 percent, while Dow was nearly flat.

The strength on Wall Street came following the release of a report from IHS Markit showing U.S. business activity expanded at the fastest pace in over a year in the month of August.

The IHS Markit flash composite index of purchasing managers at manufacturers and service providers climbed to an eighteen-month high of 54.7 in August from 50.3 in July.

The increase by the index came as the IHS Markit reading on manufacturing activity reached a nineteen-month high, while the reading on service sector activity indicated growth for the first time since January.

Adding to the positive sentiment, the National Association of Realtors released a report showing existing home sales in the U.S. continued to soar in the month of July.

NAR said existing home sales skyrocketed by a record 24.7 percent to an annual rate of 5.86 million in July after spiking by 20.2 percent to a revised rate of 4.70 million in June.

Economists had expected existing home sales to jump by 14.0 percent to an annual rate of 5.38 million from the 4.72 million originally reported for the previous month.

"The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days," said Lawrence Yun, NAR's chief economist.

Housing stocks showed a strong move to the upside following the existing home sales data, driving the Philadelphia Housing Sector Index up by 1.6 percent.

Significant strength was also visible among computer hardware stocks, as reflected by the 1.1 percent gain posted by the NYSE Arca Computer Hardware Index.

Apple (AAPL) helped to lead the sector higher, with the tech giant surging up by 5.2 percent to a new record closing high.

On the other hand, oil service stocks moved sharply lower on the day, dragging the Philadelphia Oil Service Index down by 3.4 percent. The sell-off by oil service stocks came amid a decrease by the price of crude oil.

A decrease by the spot gold price also weighed on gold stocks, resulting in a 2.3 percent slump by the NYSE Arca Gold Bugs Index.

Commodity, Currency Markets

Crude oil futures are rising $0.35 to $42.69 a barrel after falling $0.48 to $42.34 a barrel last Friday. Meanwhile, after inching up $0.50 to $1,947 an ounce in the previous session, gold futures are jumping $15.20 to $1,962.20 an ounce.

On the currency front, the U.S. dollar is trading at 105.82 yen versus the 105.80 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1835 compared to last Friday's $1.1797.


Asian stocks rose on Monday as life started to return to normal in China and the U.S. Food and Drug Administration granted emergency authorization for the use of blood plasma to treat hospitalized coronavirus patients.

Investors now look ahead to a speech by Federal Reserve Chair Jerome Powell at the Kansas City Fed's Jackson Hold symposium later this week for more clarity on the direction of U.S. monetary policy.

Chinese shares ended slightly higher as several tech firms surged on their ChiNext debut. The benchmark Shanghai Composite Index edged up 4.96 points, or 0.2 percent, to 3,385.64, while Hong Kong's Hang Seng Index soared 437.74 points, or 1.7 percent, to 25,551.58.

Japanese stocks closed higher, though the upside remained limited amid speculation surrounding Prime Minister Shinzo Abe's health. "I'd like to take care of my health and do my best at my job," Abe told reporters after visiting a Tokyo hospital this morning.

The Nikkei 225 Index inched up 65.21 points, or 0.3 percent, to 22,985.51, while the broader Topix closed 0.2 percent higher at 1,607.13. Among the top gainers, Nintendo surged 4.8 percent and Mitsui & Co added 1.1 percent.

Australian markets eked out modest gains as fresh coronavirus infections slowed in Victoria. The benchmark S&P/ASX 200 Index edged up 18.40 points, or 0.3 percent, to 6,129.60, snapping two straight sessions of losses. The broader All Ordinaries Index ended up 29.60 points, or 0.5 percent, at 6,300.30.

Buy-now-pay-later firm Afterpay surged 4.8 percent after it announced an acquisition in Europe. Energy companies fell broadly, with Origin Energy, Woodside Petroleum and Santos all falling over 1 percent after crude oil prices declined on Friday.

Airline Qantas Airways slumped 4.4 percent after it scrapped the executive role overseeing international services.

Fortescue Metals Group rallied 3.2 percent as the iron ore producer posted a record annual profit.

AMP rose over 1 percent. The wealth manager said that David Murray has resigned as the company's chairman, while executives John Fraser and Boe Pahari have also stepped down from their current roles amid accountability concerns following a sexual harassment complaint against Pahari.

Seoul stocks rose for a second straight session even as authorities reported the highest daily rise in novel coronavirus cases since early March and the President said the country has no choice but to raise social distancing measures to the highest level if the Covid-19 spread isn't contained.

The benchmark Kospi jumped 25.24 points, or 1.1 percent, to 2,329.83 as investors went bargain hunting in large-cap stocks.

Chipmaker SK Hynix gained 1.3 percent, top pharmaceutical firm Samsung Biologics climbed 2.6 percent and internet portal giant Naver advanced 2.4 percent. Hyundai Motor, the country's largest automaker, soared 3.5 percent.


European stocks have moved sharply higher on Monday as hopes for a coronavirus treatment as well as signs of a thaw in U.S.-China tensions offset fears about a resurgence in virus cases across the continent.

Investor sentiment was boosted after U.S. regulators authorized the use of blood plasma from recovered patients as a treatment option for Covid-19.

The U.S. FDA's emergency authorization came on the eve of the Republican National Convention, where Donald Trump will be nominated to lead his party for four more years.

Meanwhile, a Bloomberg report citing people familiar with the matter said that Trump's team is privately seeking to reassure U.S. companies that they can still do business with the WeChat messaging app in China.

While the German DAX Index has spiked by 2.4 percent, the French CAC 40 Index is up by 2.2 percent and the U.K.'s FTSE 100 Index is up by 1.8 percent.

AstraZeneca shares have jumped. The Financial Times said the Trump administration is considering fast-tracking an experimental Covid-19 vaccine being developed by AstraZeneca and Oxford University to return the economy closer to normalcy.

Shares of BT Group have also soared. Sky News reported the telecom giant has asked Goldman Sachs to update its defense strategy from possible suitors.

Bunzl has also risen after the distribution and outsourcing firm resumed dividends and reported a 16.6 percent rise in first-half profit.

Insurance firm Axa SA has also advanced. The company announced an agreement with India's Bharti Enterprises to combine their non-life insurance operations in India, Bharti AXA General Insurance Company Limited or Bharti AXA GI, into ICICI Lombard General Insurance Co. Ltd.

U.S. Economic Reports

No major U.S. economic data is scheduled to be released today, although reports on new home sales, consumer confidence, durable goods orders, and personal income and spending are likely to attract attention in the coming days.

Stocks In Focus

Shares of Takeda Pharmaceutical (TAK) are moving notably higher in pre-market trading after the biopharmaceutical company agreed to sell its consumer healthcare business to Blackstone (BX) for about $2.3 billion.

Heavy equipment maker Deere (DE) may also see initial strength after Bank of America Securities upgraded its rating on the company's stock to Buy from Neutral.

On the other hand, shares of Pinterest (PINS) may move to the downside after Citi downgraded its rating on the image-sharing platform to Neutral from Buy.

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