Wall Street gains on strong services sector data, China-led recovery hopes

By Medha Singh and C Nivedita (Reuters) - Wall Street's major indexes climbed on Monday as data showing unexpected growth in the U.S. services sector last month and optimism over China's economic revival helped investors look past a surge in new cases of COVID-19 at home.

Reuters July 07, 2020 00:08:13 IST
Wall Street gains on strong services sector data, China-led recovery hopes

Wall Street gains on strong services sector data Chinaled recovery hopes

By Medha Singh and C Nivedita

(Reuters) - Wall Street's major indexes climbed on Monday as data showing unexpected growth in the U.S. services sector last month and optimism over China's economic revival helped investors look past a surge in new cases of COVID-19 at home.

The ISM's non-manufacturing activity index jumped to 57.1 in June, almost returning to pre-pandemic levels, but a recent surge in COVID-19 cases in the United States has threatened the emerging recovery.

During Asian hours, Chinese stocks jumped more than 5% on ample liquidity, cheap funding and expectations of a faster and a better bounce-back in business activity than other major countries that are still battling the coronavirus crisis.

A slew of upbeat U.S. data, including a record rise in monthly payrolls, has powered the Nasdaq <.IXIC> to all-time highs and has helped the S&P 500 <.SPX> and the Dow <.DJI> shed much of their losses. The S&P 500 is about 6% below its February peak, while the Dow is about 11% below its record high from that month.

"Investors are more focused on what the other side of this pandemic looks like, as opposed to the short-term risks of shutdowns," said Matt Lindholm, managing director - investment strategies at CAZ Investments in Houston.

The S&P 500 rose for the fifth day, undeterred by a record surge in new COVID-19 cases in 16 states in the United States this month that could further hamper reopening plans and poses a big risk to the economic recovery.

Over the Independence Day weekend, several states reported a record increase in new infections, with Florida surpassing the highest daily tally reported by any European country during the peak of the outbreak there.

"July is going to be critical in making sure the virus can be contained and in a way that the economic recovery can continue and if Democrats or Republicans get together to continue to supply a type of fiscal stimulus that can continue to support the economy," said Keith Buchanan, senior portfolio manager at GLOBALT Investments in Atlanta.

At 12:38 p.m. ET, the Dow Jones Industrial Average <.DJI> was up 329.03 points, or 1.27%, at 26,156.39, the S&P 500 <.SPX> was up 41.52 points, or 1.33%, at 3,171.53. The Nasdaq Composite <.IXIC> was up 211.59 points, or 2.07%, at 10,419.21.

Nine of the 11 major S&P sectors were trading higher, with technology <.SPLRCT> providing the biggest boost to the S&P 500. Online retail giant Amazon.com crossed $3,000 for the first time and was the top support to the benchmark index and the Nasdaq.

Among individual shares, Tesla Inc surged 10%, rising for the fifth session as JPMorgan bumped up its price target for the electric carmaker's stock following better-than-expected quarterly deliveries.

Uber Technologies Inc climbed 6.4% after the ride-sharing company agreed to buy food-delivery app Postmates Inc in a $2.65-billion all-stock deal.

Advancing issues outnumbered decliners by a 2.13-to-1 ratio on the NYSE and by a 1.77-to-1 ratio on the Nasdaq.

The S&P index recorded 38 new 52-week highs and no new low, while the Nasdaq recorded 141 new highs and 11 new lows.

(Reporting by Medha Singh and C Nivedita in Bengaluru; Editing by Uttaresh.V and Maju Samuel)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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