What’s happening: US stocks closed higher on Monday, with the Nasdaq 100 hitting another record high and the S&P 500 turning positive year to date.
What happened: While rising covid-19 cases have been boosting tech stocks, investors also responded to talks beginning on additional stimulus to lift the economy and the busy earnings season with several companies reporting results.
Markets also focused on positive news of covid-19 vaccine candidates by various pharma companies. The Nasdaq 100 recorded its best single day rise in around twelve weeks on Monday, although the S&P 500 and Dow Jones index rose only slightly.
Why it matters: Coronavirus cases in the US have risen to nearly 4 million, while the death toll has crossed 140,000. The extension of shelter-in-place orders in various US states, including Florida, California and Texas, boosted the FANG stocks - Facebook, Amazon, Netflix, and Alphabet.
While shares of Facebook, Netflix, and Alphabet rose in the 2%-3% range on Monday, Amazon’s stock jumped almost 8%. Amazon is a key beneficiary of the increased adoption of online shopping by customers and continued shift to the cloud by enterprises.
The US also started another busy week of earnings on a strong note, with Halliburton and Cal-Maine Foods reporting upbeat quarterly results.
Markets also cheered encouraging news of covid-19 vaccine candidates from two major pharma companies. AstraZeneca, which is developing its vaccine with the University of Oxford, said that its candidate delivered promising results in its Phase I clinical trial. BioNTech and Pfizer Inc. also reported that their vaccine candidate showed the production of antibodies in covid-19 infected patients in the Phase I and II clinical trials.
Investors also kept an eye on any news of a new stimulus package, with the Congress returning yesterday from a more than two-week recess.
After falling 1.1% last week, the Nasdaq 100 jumped 263.90 points to settle at a record high of 10,767.09 on Monday, notching its best daily percent rise since April 29.
After remaining in negative territory for most of the session, the Dow Jones index rose 8.92 points to settle at 26,680.87 on Monday, while the S&P 500 gained 0.8% to reach 3,251.84 and turned positive year to date. The Dow Jones index recorded a weekly rise of 2.3% and the S&P 500 booked 1.3%.
What to watch: Markets will focus on earnings reports, with some major companies scheduled to release their quarterly results today. Among the most awaited ones are Coca-Cola Company, Philip Morris International, Lockheed Martin Corporation and United Airlines Holdings, Inc.
Today’s economic calendar remains light for the US, with only the Chicago Fed National Activity Index expected to be released. Investors will also continue to keep an eye on the covid-19 figures.