US open: Stocks continue rally despite record spike in new Covid-19 cases
By Iain Gilbert
Date: Monday 13 Jul 2020
(Sharecast News) - Wall Street stocks opened sharply higher at the bell on Monday as investors appeared to ignore another record spike in new Covid-19 cases in Florida at the weekend.
As of 1545 BST, the Dow Jones Industrial Average was up 1.28% at 26,408.49, while the S&P 500 was 1.04% firmer at 3,218.21 and the Nasdaq Composite came out the gate 1.47% stronger at 10,773.87.
The Dow Jones opened 333.19 points higher on Monday, continuing a rally started on Friday as news about a potential coronavirus treatment bolstered investor sentiment around prospects for the economic recovery.
The southern state of Florida reported a total of 15,299 new Covid-19 cases on Sunday, marking the single highest single-day total for any US state since the pandemic began, while the US as a whole has reported more than 60,000 new cases every day for the last three days.
Perhaps as a result of the increased number of new cases, tech stocks were making positive moves after the opening bell as investors remained positive on the resilience of Apple, Amazon, Netflix and Tesla amid the pandemic.
Also in focus, Pfizer and BioNTech shares rallied at the open after the pharma groups said two of their vaccine candidates to protect against the coronavirus had received Fast Track designation status from the Food and Drug Administration.
Investors were also looking ahead to the start of earnings season this week, with JPMorgan, Citigroup and Wells Fargo all set to report second-quarter earnings in about 24 hours time.
Oanda's Edward Moya said: "Global stocks are rising ahead of an earnings storm that will likely deliver the worst plunge in profits since the Great Recession. With many traders anticipating roughly a 40% drop in corporate profits, businesses could be ready to deliver a round of job cuts to shore up their balance sheets.
"Wall Street remains fixated with the recovery trade but that will be hard to hypothesise as the path of virus is unknown. The end result for many traders remains that the Fed is keeping rates near zero for at minimum a couple years, governments will continue to deliver fiscal stimulus, and that recovery ahead might have only got pushed back a quarter."
In corporate news, chipmakers were in the green after Analog Devices made an offer to buy Maxim Integrated as part of a $21bn all-stock deal, while Pepsi shares were up 1.98% after reporting that while second-quarter beverage revenues had taken a hit as a result of the coronavirus outbreak, snack food stockpiling helped the company beat expectations on the Street and provide a small boost to risk appetite.
On the macro calendar, the Government's monthly budget statement will be published at 1900 BST, while Federal Reserve heads John Williams and Robert Kaplan will deliver speeches at 1630 BST and 1800 BST, respectively.
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