U.S. Stocks Move Mostly Higher As Social Distancing Guidelines Extended
Following the pullback seen in the previous session, stocks are showing a strong move back to the upside in morning trading on Monday. With the upward move, the major averages are adding to the substantial gains posted last week.
The major averages have seen further upside in recent trading, reaching new highs for the session. The Dow is up 367.23 points or 1.7 percent at 22,004.01, the Nasdaq is up 183.79 points or 2.5 percent at 7,686.17 and the S&P 500 is up 49.41 points or 1.9 percent at 2,590.88.
The strength on Wall Street comes after President Donald Trump extended national social distancing guidelines until at least April 30th.
Trump had previously hoped to reopen the country by Easter Sunday, on April 12th, but said he decided to extend the guidelines in an effort to keep the death toll from the coronavirus below 100,000.
The announcement by Trump on Sunday comes as data from Johns Hopkins University shows more than 143,000 confirmed coronavirus cases in the U.S. and more than 2,500 deaths.
The extension of the social distancing guidelines means continued pressure on the economy, although traders may be breathing a sigh of relief that Trump decided against lifting the guidelines prematurely.
Some public health experts warned that reopening the country too early risked making the coronavirus outbreak even worse.
News on the coronavirus front is likely to remain in focus throughout the week, although the Labor Department’s monthly jobs report on Friday is still likely to attract attention.
Economists currently expect the report to show a loss of about 148,000 jobs in March, with the unemployment rate jumping to 3.9 percent from 3.5 percent.
The National Association of Realtors released a report this morning showing an unexpected jump in pending home sales in the month of February, pointing to a healthy housing market before the coronavirus-induced shutdown,
NAR said its pending home sales index surged up by 2.4 percent to 111.5 in February after spiking by 5.3 percent to an upwardly revised 108.9 in January. The continued increase surprised economists, who had expected pending home sales to pull back by 1.0 percent.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
Pharmaceutical stocks have shown a substantial move to the upside in morning trading, driving the NYSE Arca Pharmaceutical Index up by 4.4 percent.
Abbott (ABT) is leading the sector higher after the FDA issued Emergency Use Authorization for the healthcare company’s coronavirus test, which Abbott said is the fastest available molecular point-of-care test for the detection of COVID-19.
Significant strength has also emerged among software stocks, as reflected by the 4.4 percent jump by the Dow Jones U.S. Software Index.
Tobacco, gold, and semiconductor stocks are also seeing considerable strength on the day, while oil service, housing and banking stocks have shown notable moves to the downside.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan’s Nikkei 225 Index slumped by 1.6 percent, while China’s Shanghai Composite Index slid by 0.9 percent.
Meanwhile, the major European markets have turned mixed on the day. While the French CAC 40 Index is down by 0.4 percent, the U.K.’s FTSE 100 Index is just above the unchanged line and the German DAX Index is up by 0.7 percent.
In the bond market, treasuries are extending the upward move seen over the two previous sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 14.3 basis points at 0.606 percent.
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