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By Sinéad Carew
NEW YORK, June 22 (Reuters) - Wall Street's three major
indexes closed higher on Monday with the biggest gains in
technology stocks as investors focused on the potential for more
government stimulus measures even as they worried about an
increase in coronavirus cases in the United States and other
countries.
The World Health Organization reported a record rise in
global coronavirus cases on Sunday, driving demand for perceived
safe havens including gold and longer-term U.S. Treasuries.
US/ GOL/
While New York City on Monday celebrated the lifting of many
coronavirus restrictions, a dozen states in the U.S. South and
Southwest reported record increases in new cases with 10% to 20%
of people testing positive in some. However White House economic adviser Larry Kudlow told CNBC
earlier in the day that there was no second wave of the pandemic
and that it is unlikely there will be widespread shutdowns
across the country. Investors were also clinging to hopes for more government
stimulus after U.S. House of Representatives Democrats on
Thursday unveiled a $1.5 trillion infrastructure bill in the
same week that reports emerged of preparations by the Trump
administration for a infrastructure stimulus plan. "The good news from last week is dominating the bad news
from today, which is the increase in COVID cases," said Nela
Richardson, investment strategist at Edward Jones, who cautioned
that government infrastructure spending plans have failed to
become reality several times in the recent past.
Richardson said rising virus case numbers spurred a rotation
out of sectors hit hardest by coronavirus' economic impacts
into more resilient sectors such as technology.
Unofficially, the Dow Jones Industrial Average .DJI rose
151.58 points, or 0.59%, to 26,023.04, the S&P 500 .SPX gained
20.42 points, or 0.66%, to 3,118.16 and the Nasdaq Composite
.IXIC added 110.35 points, or 1.11%, to 10,056.48.
Investors were also looking past the current quarter and
into 2021, when earnings are expected to start improving
according to Sam Stovall, chief investment strategist at CFRA.
Analysts expect a 42.7% drop in earnings per share for the
second quarter, according to estimates gathered by Refinitiv.
Of the S&P's 11 major sectors, technology was leading the
pack. However the next biggest gainer was the defensive
utilities .SPLRCU sector.
The market took a step back on Friday after Apple Inc's
AAPL.O move to temporarily shut some U.S. stores again
underscored concerns of a delay in the recovery.
But Apple shares were climbing on Monday and trading at
record highs as the company announced new products at its annual
conference for software developers.
Travel-related stocks were some of the weakest as those
companies have been hit hard in the past by the virus lockdowns.
The S&P 1500 airlines index .SPCOMAIR dropped, while
shares of cruise operators Norwegian Cruise Line NCLH.N and
Royal Caribbean Cruises RCL.N .
U.S.-based meat processor Tyson Inc TSN.N slipped as
China's customs authority suspended imports of poultry products
from a plant owned by the company that had been hit by the
coronavirus. American Airlines Group Inc AAL.O fell as it planned to
secure $3.5 billion in new financing by selling shares and
convertible senior notes to boost liquidity. Virgin Galactic Holdings Inc SPCE.N soared as it signed up
with NASA to develop a program to promote private missions to
the International Space Station.