The S&P 500 and the Nasdaq reached new record closing highs on Monday as optimism over potential medical advances in the war against the coronavirus pandemic pushed all three major U.S. stock indexes higher.
The benchmark S&P 500 reclaimed its February closing high last week, confirming a bull market and the fastest recovery from a bear market trough on record.
Of note, the Dow Transports index , often considered a barometer of U.S. economic health, handily outperformed the broader market.
“There’s been a broadening in this rally and the what’s reflected in the transports,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. “(Higher) volume is accompanying this expanding breadth, and those are all bullish things.”
Markets worldwide were given a boost by new developments in the global race to battle the coronavirus, including an announcement from the Food and Drug Administration that it had given emergency authorization for the use of plasma from recovered patients as a treatment option.
However, the World Health Organization expressed skepticism about the treatment due to “low quality” data.
The Trump administration is considering fast-tracking an experimental COVID-19 vaccine being developed by AstraZeneca Plc and Oxford University in hopes it could be deployed in the United States before Americans head to the polls in November.
“There’s an element of that news helping the ‘reopening trade,’ which is a euphemism of economically sensitive stocks performing better,” Carlson added.
The four-day Republican national convention gets under way on Monday, with the party nominating President Donald Trump for a second term and making the case for his re-election.
On Capitol Hill, partisan wrangling over stalled coronavirus aid talks continued, and congressional Democrats and Republicans remain at loggerheads over funding levels and unemployment benefits.
Market participants will pay close attention to U.S. Federal Reserve Chairman Jerome Powell’s remarks on monetary policy at this week’s Kansas City Fed Jackson Hole symposium, which is being held this year in a virtual format.
Unofficially, the Dow Jones Industrial Average rose 384.61 points, or 1.38%, to 28,314.94, the S&P 500 gained 34.93 points, or 1.03%, to 3,432.09 and the Nasdaq Composite added 69.77 points, or 0.62%, to 11,381.57.
Of the 11 major sectors in the S&P 500, all but healthcare ended the session in the black.
Energy and financials enjoyed the largest percentage gains.
Ahead of its 4-to-1 share split on Friday, Apple Inc closed above $500 days after becoming the first public U.S. company to top $2 trillion in market value.