After turning in a lackluster performance earlier in the session, stocks have moved mostly higher over the course of the trading day on Monday. With the upward move, the tech-heavy Nasdaq is on pace to end the session at a new record closing high.
Currently, the major averages are just off their best levels of the day. The Dow is up 106.92 points or 0.4 percent at 25,978.38, the Nasdaq is up 80.25 points or 0.8 percent at 10,026.37 and the S&P 500 is up 14.71 points or 0.5 percent at 3,112.45.
The strength on Wall Street comes as traders continue to express optimism the U.S. economy will quickly recover from the coronavirus-induced setback.
Recent retail sales and employment data far exceeded estimates, helping reinforce hopes of a V-shaped recovery even as most economists urge caution.
Traders have shrugged off a report from the National Association of Realtors showing a continued nosedive in existing home sales, as the group’s chief economist was confident sales would rebound in the coming months.
NAR said existing home sales plunged by 9.7 percent to an annual rate of 3.91 million in May after plummeting by 17.8 percent to a rate of 4.33 million in April. Economists had expected existing home sales to slump by 4.8 percent to a rate of 4.12 million.
“Sales completed in May reflect contract signings in March and April – during the strictest times of the pandemic lockdown and hence the cyclical low point,” said Lawrence Yun, NAR’s chief economist.
He added, “Home sales will surely rise in the upcoming months with the economy reopening, and could even surpass one-year-ago figures in the second half of the year.”
The economic optimism has also overshadowed concerns about rising coronavirus cases in the U.S. and other parts of the world.
According to the World Health Organization, more than 183,000 new coronavirus infections were reported globally on Sunday, the biggest single-day increase since the outbreak began.
Brazil has become a major coronavirus hotspot in recent weeks and led the spike in new infections with 54,771 new cases.
The U.S. was next with 36,617 new cases as states in the South, West and Midwest see surges in new infections following recent reopening.
During his speech in Tulsa, Oklahoma, on Saturday, President Donald Trump blamed the jump in new cases on increased testing and suggested he would like to see testing slowed down.
Gold stocks have shown a substantial move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 3.3 percent.
The rally by gold stocks comes amid another sharp increase by the price of precious metal, with gold for August delivery surging up $18.10 to $1,771.10 an ounce.
Significant strength is also visible among software stocks, as reflected by the 2 percent jump by the Dow Jones U.S. Software Index. With the gain, the index has reached a new record intraday high.
Utilities stocks are also turning in a strong performance in mid-day trading, resulting in a 1.4 percent advance by the Dow Jones Utility Average.
On the other hand, tobacco stocks have moved sharply lower on the day, dragging the NYSE Arca Tobacco Index down by 2.2 percent.
In overseas trading, stock markets across the Asia-Pacific region ended flat to slightly lower during trading on Monday. Japan’s Nikkei 225 Index dipped by 0.2 percent, while China’s Shanghai Composite Index edged down by 0.1 percent.
Meanwhile, the major European markets moved to the downside over the course of the session. While the U.K.’s FTSE 100 Index slid by 0.8 percent, the French CAC 40 Index and the German DAX Index both fell by 0.6 percent.
In the bond market, treasuries are seeing modest strength after ending last Friday’s trading nearly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1 basis point at 0.687 percent.
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