Stocks rose on Monday, building on solid gains from last week, as shares of major tech companies led the way higher on Wall Street.
The Dow Jones Industrial Average gained 124 points, or 0.5%, while the S&P 500 was up 0.6%. The tech-heavy Nasdaq Composite gained 0.9%. The major averages pared some of their gains towards the end of the session, after Texas Gov. Greg Abbott told reporters the coronavirus is spreading at an unacceptable rate.
Microsoft shares climbed more than 2% along with Apple to lead the Dow higher. Amazon advanced 1.1%. Netflix gained 2.6%. Facebook eked out a small gain.
Retail names, which are directly linked to the economic reopening, were also among the biggest gainers. Shares of Gap were higher by 9%, boosted by an upgrade at Wells Fargo, citing the retailer’s “under-appreciated value and optionality.” Walmart gained more than 1% after an upgrade by UBS.
Shares of American Airlines — which are also linked to the recovery — were lower by 5.6% after the company said it was seeking new financing. United fell 2.3%. Reopening trades such as Casino and hotel stocks were also under pressure with Wynn Resorts and MGM Resorts down 4.2% and 2.1%, respectively.
“Investors are using the market as a proxy for getting back to normal,” said Kim Forrest, founder of Bokeh Capital. “If too many people get sick, they’re going to shut down parts of the economy and the market will react.”
“I’m just looking for that first state shutdown or area shutdown in the U.S. That’s going to remind investors of what happened this spring,” Forrest said.
The major U.S. stock averages are coming off their fourth weekly gain in five weeks. Both the Dow and S&P 500 advanced at least 1% last week, while the Nasdaq Composite surged more than 3%.
But the number of newly confirmed coronavirus cases across the U.S. and elsewhere in the world continues to increase, raising questions about the global economic recovery.
“The areas of concern that weighed on stocks Friday afternoon were reinforced over the weekend,” Adam Crisafulli of Vital Knowledge wrote in a note. “Governments look set to proceed with reopening, but the real driver of growth will be behavioral normalization and that is very likely to be impended by the steady negative coronavirus news flow.”
The U.S. reported more than 30,000 additional coronavirus cases on Friday, the highest number of confirmed one-day infections since May 1, data compiled by Johns Hopkins University showed. Nevada, Florida, California and Arizona have reported record-high single-day infections.
“There’s a war going on between the bulls and bears, with each seizing every little data point to buttress their opposing arguments,” said Vito Racanelli, market intelligence analyst at Fundstrat Global Advisors, in a note.
“I do think that perhaps the market has gone past its recovery ‘straight-up’ phase, as investors realized coronavirus (COVID-19) was not a world ender,” Racanelli said. “But the data remains mixed and Covid-19 fear remains strong, and it’s understandable.”
The S&P 500 has ripped more than 41% higher since hitting an intraday low on March 23. For the quarter, the broader market index is up by nearly 20%.
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—CNBC’s Yun Li and Michael Bloom contributed to this report.