US stocks have risen, led in part by healthcare stocks as investors looked for shares that have become cheap and can withstand the impact to the economy from efforts to stem the spread of the coronavirus.
The S&P healthcare sector jumped 4.67 per cent on Monday, in part due to gains in Johnson & Johnson and Abbot Laboratories.
JNJ surged eight per cent on the US government’s plans to help fund the creation of enough manufacturing capacity for its coronavirus vaccine, currently under development.
Abbott Laboratories climbed 6.41 per cent after winning US approval for a diagnostic test for COVID-19.
Along with healthcare, the technology sector also rose more than four per cent on the day, as Microsoft shares jumped more than seven per cent, the biggest boost to the broad S&P 500.
A record $US2.2 trillion ($A3.6trillion) in aid and policy easing from the Federal Reserve helped equities recover some of their losses last week, with the S&P 500 posting its biggest weekly percentage gain in more than a decade and the Dow Jones its best since 1938, even after each dropped more than three per cent to end the trading week on Friday.
Each of Wall Street’s three major indexes remain down more than 20 per cent from the February highs but investors are now trying to assess the economic damage and identify which companies will be on solid footing when the economy begins to accelerate.
The Dow Jones Industrial Average rose 690.7 points, or 3.19 per cent, to 22,327.48, the S&P 500 gained 85.18 points, or 3.35 per cent, to 2,626.65 and the Nasdaq Composite added 271.77 points, or 3.62 per cent, to 7,774.15.
President Donald Trump followed last week’s massive fiscal stimulus package by extending his stay-at-home guidelines, leaving investors to await more signs on the next stages of a deepening economic crisis.
That is convincing few the worst of the most dramatic sell-off in a decade is over and Wall Street’s fear gauge, which predicts future volatility, is still running as high as it has been since the 2008 financial crisis.
However, the prospect of more government stimulus has given investors something to hold on to as they wait for signs of economic relief.
JPMorgan Chase & Co said on Saturday it expected real US gross domestic product to fall 10 per cent in the first quarter and plunge 25 per cent in the second quarter.
Advancing issues outnumbered declining ones on the NYSE by a 1.56-to-1 ratio; on Nasdaq, a 1.67-to-1 ratio favoured advancers.
The S&P 500 posted one new 52-week high and two new lows; the Nasdaq Composite recorded six new highs and 30 new lows.
Volume on US exchanges was 12.19 billion shares, compared with the 15.81 billion average for the full session during the past 20 trading days.