NEW YORK, July 27 — US stocks rose today after a two-day slide, as investors shrugged off surging Covid-19 cases and US-China tensions, betting instead on more stimulus and a dovish signal from the Federal Reserve to revive a battered domestic economy.
Still, safe haven assets were in demand with gold prices notching a record high amid concerns over a diplomatic row between the United States and China, escalating Covid-19 cases in southern and western US states and an unexpected rise in US jobless claims last week.
Trillions of dollars in fiscal and monetary stimulus have been pivotal in bringing the S&P 500 to within 5 per cent of its record high hit in February.
Expectations are running low for any major announcements at a two-day Federal Reserve meeting this week, but analysts expect policymakers to lay the groundwork for more action in September or in the fourth quarter.
Investors are also keeping a close watch on progress over the next round of government aid ahead of enhanced unemployment benefits set to expire on Friday.
US Senate Republicans on Monday are expected to unveil a US$1 trillion coronavirus aid package hammered out with the White House, which will now be negotiated with Democrats.
“The market is looking at this as a nice bridge of one to one-and-a-half trillion dollars to get us to the period in which we either have a treatment, or more likely a full vaccine toward the end of the year,” said Thomas Hayes, managing member at Great Hill Capital LLC in New York.
Apple Inc, Amazon.com Inc, Facebook Inc and Alphabet Inc rose between 1.8 per cent and 2.6 per cent, and were among the top boosts to the S&P 500 and Nasdaq. They are among the 189 S&P 500 companies expected to report results this week.
Technology and consumer discretionary sectors rose over 1 per cent each, while bank stocks, which tend to weaken when the economic outlook darkens, lagged with their 1.6 per cent fall.
At 9.56am ET, the Dow Jones Industrial Average was up 108.29 points, or 0.41 per cent, at 26,578.18, the S&P 500 was up 18.55 points, or 0.58 per cent, at 3,234.18. The Nasdaq Composite was up 136.34 points, or 1.32 per cent, at 10,499.52.
Investors will get the first glimpse of the second-quarter US GDP report on Thursday, which is likely to show the economy contracted by 34 per cent in the three-month period.
Moderna Inc jumped 5.7 per cent as it started a US government-backed late-stage trial to assess its Covid-19 vaccine candidate in about 30,000 adults.
Hasbro Inc dropped 8 per cent after the toymaker missed estimates for quarterly earnings and revenue, hit by production shutdowns due to coronavirus lockdowns.
Walgreens Boots Alliance Inc fell 1.8 per cent on news its Chief Executive Officer Stefano Pessina has decided to step down.
Advancing issues outnumbered decliners for a 1.35-to-1 ratio on the NYSE and a 1.78-to-1 ratio on the Nasdaq.
The S&P index recorded five new 52-week highs and no new low, while the Nasdaq recorded 34 new highs and 11 new lows. — Reuters
