Wall Street gained ground on Monday and surging technology shares pushed the Nasdaq to a record closing high, as promising trial results from potential COVID-19 vaccines helped investors look beyond spiraling new cases of the disease. The TSX also closed higher, bolstered by a jump in shares of Shopify and a rally in the materials sector, which benefited from gold rising to its highest levels since September 2011.
Amazon.com Inc and Microsoft Corp provided the biggest boosts to the Nasdaq and the S&P 500, but industrials retreated, capping the Dow’s nominal gains. In Canada, both the heavyweight energy and financial sectors lost ground, limiting gains for the TSX.
Deaths in the United States from COVID-19 passed the 140,000 mark over the weekend, as cases continued to rise in 42 of 50 states.
Trials of potential vaccines have shown promise. Most recently, drugs from AstraZenica, CanSino Biologics Inc and from a partnership between Pfizer Inc and German biotech firm BioNTech were safely administered and induced immune responses.
“Developments on COVID, positive or negative, have become the new risk-on/risk-off binary trigger for the market,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. “A year ago it was trade.”
“In the next few weeks there will start to be risk assessments made on how the size of the next round of financial stimulus,” Sroka added.
The U.S. Congress, still looking to mitigate the pandemic’s economic effects, was set for a week of partisan wrangling over a new relief package, with two weeks until enhanced jobless benefits expire for millions of Americans.
The Dow Jones Industrial Average rose 8.92 points, or 0.03%, to 26,680.87, the S&P 500 gained 27.11 points, or 0.84%, to 3,251.84 and the Nasdaq Composite added 263.90 points, or 2.51%, to 10,767.09.
Of the 11 major sectors in the S&P 500, consumer discretionary and tech enjoyed the largest percentage gains.
The S&P/TSX Composite Index rose 60.18 points, or 0.37%, at 16,183.66. The energy sector lost 1.75% and financials 0.46%. But materials gained 1.98% as gold prices jumped to their highest since September 2011, and silver hit a near four-year peak, as a spike in COVID-19 infections and hopes for increased stimulus measures supported safe-haven demand. U.S. gold futures settled up 0.4 per cent to $1,817.40 per ounce. Silver rose 2.3 per cent to $19.76 per ounce, having hit a peak since September 2016 at $19.81 on increasing safe-haven flows.
Meanwhile, Shopify returned to rallying mode, gaining 8.46%. At $1,368, it’s still well off its all-time high of $1,457.90 from earlier this month.
Second-quarter earnings season chugged along in the U.S. Some 48 companies in the S&P 500 have posted results, with 77.1% of those beating consensus, according to Refinitiv data.
In aggregate, analysts now expect S&P 500 second-quarter earnings to have dropped 43.2% year-on-year, per Refinitiv.
The Canadian earnings calendar heats up this week; Canadian National Railway reports results Tuesday after the close.
Shares of Halliburton Co rose 2.5% after the company posted a surprise adjusted quarterly profit and better-than-expected cash flow due to cost-cutting.
Noble Energy Inc advanced 5.4% on news that Chevron Corp agreed to buy the oil and gas producer for $5 billion. Chevron dropped 2.2%.
Moderna Inc shares tumbled 12.8% on positive results from its competitors’ rival COVID-19 drug trials.
Electric automaker Tesla Inc rose 9.5% to reach a record closing high of $1,643.
Shares of International Business Machines Corp were up over 5% in post-market trading after the company’s adjusted earnings came in above analyst expectations.
Reuters, Globe staff
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