Wall Street Closes Higher Despite Protests and Pandemic Worries
US stocks posted gains on Monday as signs of U.S. economic recovery helped offset jitters over increasingly violent social unrest amid an ongoing pandemic and rising U.S.-China tensions.
All three major U.S stock indices began the month with gains of less than 1% on the heels of a strong rally in May.
“Certainly the pace of the stock market recovery can’t contnue at the pace it has been,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. “I’m stunned at how well the market’s been doing. It’s truly a head-scratcher.”
The White House called for “law and order” as U.S. cities were looted and smoldering after six nights of widespread, violent demonstrations triggered by the death of George Floyd at the hands of police, even as the country reels from the economic effects of pandemic-related lockdowns.
“Most investors are saying (the protests) aren’t going to destroy the economy,” Nolte added. “It’s a roadblock but it’s not as big as a pandemic.”
The unrest has prompted retailers such as Target Corp and Walmart Inc to shutter a portion of their stores, while Amazon.com has scaled back deliveries.
Further weighing on sentiment, China has ordered state-owned firms to halt purchases of U.S. soybeans and pork, in retaliation for President Donald Trump’s announcement that he would end special treatment for Hong Kong following China’s move to tighten security measures in the territory.
But economic data gave a boost to investor sentiment, with the Institute for Supply Management’s (ISM) purchasing managers’ index (PMI) showing the contraction of factory activity was slowing, and a decline in construction spending was not as steep as economists feared.
“The numbers are still poor, but as long as they continue to improve there’s reason for optimism,” Nolte said.
A fuller picture of the economic damage wrought by pandemic-related lockdowns is expected on Friday, when the Labor Department’s jobs report is seen showing a drop of 8 million jobs and an unemployment rate sky-rocketing to 19.7%.
Unofficially, the Dow Jones Industrial Average rose 0.37% to end at 25,476.05 points, while the S&P 500 gained 0.38%, to 3,055.75. The Nasdaq Composite climbed 0.65% to 9,551.67.
Pfizer Inc fell after the drugmaker’s breast cancer treatment was deemed unlikely to meet the main goal of a late-stage study.
Gilead Sciences Inc slid following mixed results in a late-stage study of its COVID-19 drug candidate, remdesivir.
Meanwhile, rivals firms CTI Biopharma Corp and Proteostasis Therapeutics Inc advanced following reports that their potential COVID-19 treatments showed promise.
Shares of cosmetics company Coty Inc jumped after the appointment of Chairman Peter Harf as its new chief executive officer.