From Market Insider
- US stocks climbed on Monday as investors continued to bet on economic reopenings despite soaring coronavirus case counts.
- Pending home sales rocketed a record 44.3% in May, beating expectations and pointing to a swift rebound for the US housing market.
- Global virus deaths topped 500,000 on Sunday, while confirmed cases tore above 10 million.
- Boeing led the Dow higher after US regulators approved test flights of its troubled 737 Max jet.
- Oil gained, with West Texas Intermediate jumping as much as 3.6%, to $39.89 per barrel.
US equities leaped on Monday as investors blocked out rising coronavirus case counts and focused on positive housing-market data.
Pending home sales shot a record 44.3% higher in May, the National Association of Realtors announced Monday. The reading trounced the median economist estimate of 19.3%, according to Bloomberg. The association’s metric now sits at 99.6, slightly lower than its pre-virus high of 111.4 but hinting at a steady recovery for the critical sector.
The leap “goes to show the resiliency of American consumers and their evergreen desire for homeownership,” Lawrence Yun, NAR’s chief economist, said. “This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery.”
Here’s where US indexes stood at the 4 p.m. ET market close on Monday:
- S&P 500: 3,053.25, up 1.5%
- Dow Jones industrial average: 25,595.80, up 2.3% (580 points)
- Nasdaq composite: 9,874.15, up 1.2%
Global virus deaths passed 500,000 on Sunday, while confirmed cases reached the 10 million mark. Fresh outbreaks in Florida, Texas, and California forced state governments to reverse some reopening measures to curb further damage. The spike in cases has so far not fueled a similar uptick in coronavirus deaths, but experts have said the virus’ spread could revive strict lockdowns.
Gilead soared in earning trading Monday after the biotech company priced a five-day course of remdesivir, its experimental COVID-19 treatment, at $2,340. The company also nixed country-by-country price negotiations to further expand remdesivir’s market. The stock turned negative in the afternoon and closed lower.
“As the world continues to reel from the human, social and economic impact of this pandemic, we believe that pricing remdesivir well below value is the right and responsible thing to do,” Gilead’s CEO and chairman, Daniel O’Day, said in a statement.
Facebook stock initially plummeted before retracing its losses and finishing roughly 2% higher. Several firms have recently turned away from advertising on social media to push platforms to take a stronger stance against hate speech. The exodus pushed Facebook shares lower in the previous session.
Despite the strong rally into the last week of June, Bank of America cautioned that the S&P 500 may halt its optimism for an economic rebound. The stay-at-home stocks’ premium over business-as-usual plays has significantly shrunk, and the index now sees a 50/50 split between a second wave of the coronavirus or a smooth recovery, the bank said. Prices might halt their climb higher to further monitor how state reopenings continue, the analysts added.
The upswing followed a massive fall to cap last week’s session. Major indexes plummeted more than 2% on Friday as the governors of Texas and Florida reversed some of the states’ reopening measures and warned of new virus hot spots. Bank stocks slumped after the Federal Reserve announced it would limit stock buybacks and dividends to boost emergency reserves.
In an online conference on Friday, European Central Bank President Christine Lagarde said that though the worst of the coronavirus pandemic may be over, the global economy’s recovery would be “sequential and restrained.”