US: Dow ends up 3.2% as stocks finish solidly higher

[NEW YORK] Wall Street stocks gained more than 3 per cent Monday as markets weighed a dire near-term economic outlook against unprecedented federal spending and central bank interventions.

The Dow Jones Industrial Average jumped 3.2 per cent, or nearly 700 points, to finish the day at 22,327.48.

The broad-based S&P 500 gained 3.4 per cent to close at 2,626.85, while the tech-rich Nasdaq Composite Index advanced 3.6 per cent to 7,774.15.

Major indices were in positive territory almost the entire session despite the sharp increase in coronavirus cases in the United States and in other major economies.

"Investors might be entering the 'acceptance' phase of the crisis," said JJ Kinahan, chief market strategist at TD Ameritrade.

"People know this is going to go on a while and accept what doctors say about how things could get a little worse, but they seem to feel reassured by the Fed and Congress taking quick action to give the economy a security blanket."

Polling from Morning Consult showed US consumer confidence remained "relatively stable" over the weekend after President Donald Trump signed a US$2 trillion federal relief package.

Still, many analysts expect markets to be rocky for the foreseeable future as more terrible economic data surfaces.

A note from IHS Markit Monday significantly lowered its forecast for the US economy, projecting a contraction of 5.4 per cent in 2020, with a lengthy recovery before returning to pre-pandemic levels.

"The risks remain overwhelmingly on the downside and further downgrades are almost assured," IHS said.

Big winners in Monday's session included Johnson & Johnson, which won 8 per cent after announcing that it would begin human trials by September for a vaccine for the coronavirus.

Abbott Laboratories gained 6.5 per cent as it said it been granted emergency authorisation by the Federal Drug Administration approval to begin making available a Covid-19 test that produces results in as little as five minutes.

But some embattled travel-oriented stocks fell further, including Expedia, which shed 6.1 per cent, and JetBlue and American Airlines, which both lost 10 per cent or more.

AFP