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Wall Street gains on hopes of stimulus-powered rebound, Boeing boost | CNA

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Wall Street’s main indexes rose on Monday following a sharp selloff last week, as investors clung to hopes of a stimulus-backed economic rebound even as coronavirus cases surged, while a jump in Boeing shares boosted the blue-chip Dow.

FILE PHOTO: Traders wear masks as they work on the floor of the New York Stock Exchange as the outbreak of the coronavirus disease (COVID-19) continues in the Manhattan borough of New York, U.S., May 28, 2020. REUTERS/Lucas Jackson

REUTERS: Wall Street’s main indexes rose on Monday following a sharp selloff last week, as investors clung to hopes of a stimulus-backed economic rebound even as coronavirus cases surged, while a jump in Boeing shares boosted the blue-chip Dow.

The planemaker rose 6.4per cent after the Federal Aviation Administration confirmed on Sunday it had approved key certification test flights for the grounded 737 MAX that could begin as soon as Monday.

A spike in virus infections in Southern and Western states last week spooked U.S. markets, but the threat of a deeper-than-feared recession has led investors to expect that the Federal Reserve or Congress will step in with more stimulus.

“The market believes that the Fed has its back,” said Sam Stovall, chief investment strategist at CFRA Research in New York.

“If things get really bad, the Fed will step in with additional monetary easing and basically reach into their bag of tricks to do whatever they need to support the market.”

All 11 major S&P 500 sub-indexes were in the black, with industrial and material stocks leading gains.

The benchmark S&P 500 has rebounded since a coronavirus-driven crash in March, up about 17per cent since April and set for its best quarter since 1998, as the economy showed signs of a pickup.

Data on Monday showed contracts to buy previously owned homes rebounded by the most on record in May, suggesting the housing market was starting to turn around. Later this week, investors will focus on employment, consumer confidence and manufacturing data for June.

Still, the BlackRock Investment Institute downgraded U.S. equities to “neutral”, citing risks of fading fiscal stimulus, an extended epidemic as well as renewed China-U.S. tensions.

Stovall said some of the choppy trading on Monday was likely down to mutual fund rebalancing their portfolios at the end of the month.

At 11:41 AM ET, the Dow Jones Industrial Average rose 434.25 points, or 1.74per cent, to 25,449.8, the S&P 500 gained 31.35 points, or 1.04per cent, to 3,040.4 and the Nasdaq Composite added 65.72 points, or 0.67per cent, to 9,822.94.

Coty Inc jumped 8.7per cent after it said it would buy a 20per cent stake in reality TV star Kim Kardashian West’s makeup brand KKW for US$200 million.

Facebook Inc extended declines from Friday as a report said PepsiCo Inc was set to join a growing number of companies pulling ad dollars from the social media platform.

Advancing issues outnumbered decliners by a 3-to-1 ratio on the Nasdaq and by a 3.13-to-1 ratio the NYSE.

The S&P 500 posted one new 52-week highs and no new low; the Nasdaq Composite recorded 43 new highs and 15 new lows.

(Reporting by Pawel Goraj in Gdansk and Uday Sampath and Devik Jain in Bengaluru; Editing by Sagarika Jaisinghani and Arun Koyyur)

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