US stocks have risen sharply as a rebound in US services industry activity in June and expectations of a revival in China’s economy boosted optimism, helping investors look past a surge in new coronavirus cases.
The Institute for Supply Management’s (ISM) non-manufacturing activity index almost returned to its pre-COVID-19 pandemic levels last month, jumping to a reading of 57.1, the highest since February, from 45.4 in May, a report showed.
Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey, said the figures were significant.
“These numbers are important, and it helps to explain the increase in consumer confidence,” he said.
Investors also bet on an improving Chinese economy and its impact on the global growth as the yuan led commodity currencies higher against the dollar.
Earlier on Monday, Chinese stocks jumped more than five per cent.
A slew of upbeat US data recently, including a record rise in monthly payrolls, has powered the Nasdaq to all-time highs and has driven the S&P 500 up more than 40 per cent from its March 23 closing low.
The gains came despite a record surge in new COVID-19 cases in 16 states in the US this month that could further hamper reopening plans and create a 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.
The Dow Jones Industrial Average rose 459.67 points on Monday, or 1.78 per cent, to 26,287.03, the S&P 500 gained 49.71 points, or 1.59 per cent, to 3,179.72 and the Nasdaq Composite added 226.02 points, or 2.21 per cent, to 10,433.65.
Online retail giant Amazon crossed $US3000 for the first time and provided the biggest boost to the S&P 500 and the Nasdaq. The stock rose 5.8 per cent to end at $US3057.04.
Tesla shares jumped 13.5 per cent, 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 climbed six per cent after the ride-sharing company agreed to buy food-delivery app Postmates in a $US2.65-billion all-stock deal.
Advancing issues outnumbered declining ones on the NYSE by a 2.54-to-1 ratio; on Nasdaq, a 1.88-to-1 ratio favoured advancers.
The S&P 500 posted 38 new 52-week highs and no new lows; the Nasdaq Composite recorded 152 new highs and 14 new lows.
Volume on US exchanges was 10.91 billion shares, compared with the 12.9 billion average for the full session over the last 20 trading days.