After showing a strong move to the upside early in the session, stocks remained firmly positive throughout the trading day on Monday. The major averages extended last week’s upward trend, with the tech-heavy Nasdaq reaching another new record closing high.
While the major averages all posted strong gains, the Nasdaq outperformed its counterparts. The Nasdaq soared 226.02 points or 2.2 percent to 10,433.65, the Dow surged up 459.67 points or 1.8 percent to 26,287.03 and the S&P 500 jumped 49.71 points or 1.6 percent to 3,179.72.
Strength in overseas has carried over to Wall Street, as Chinese shares skyrocketed on the day amid positive commentary on the market from state media.
Traders also remain generally optimistic about the U.S. economic outlook following last Thursday’s better than expected jobs data.
In the latest sign of the rapid economic recovery, the Institute for Supply Management released a report showing a substantial turnaround in U.S. service sector activity in the month of June.
The ISM said its non-manufacturing index spiked to 57.1 in June from 45.4 in May, with a reading above 50 indicting an increase in service sector activity. Economists had expected the index to climb to 50.1.
The sharp increase by the non-manufacturing index reflected the largest single-month percentage-point increase since its debut in 1997.
“The non-manufacturing composite index indicated growth after two consecutive months of contraction,” said Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee.
He added, “Respondents remain concerned about the coronavirus and the more recent civil unrest; however, they are cautiously optimistic about business conditions and the economy as businesses are beginning to reopen.”
The economic optimism continues to overshadow the recent spike in coronavirus cases even as the World Health Organization reported the biggest single-day increase in cases on Saturday.
Retail stocks moved sharply higher over the course of the trading session, driving the Dow Jones U.S. Retail Index up by 3.1 percent to a new record closing high.
Substantial strength was also visible among oil service stocks, as reflected by the 3.2 percent spike by the Philadelphia Oil Service Index.
The rally by oil service stocks came even though the price of crude oil for August delivery ended the day nearly flat, edging down $0.02 to $40.63 a barrel.
Computer hardware, semiconductor, and networking stocks also saw considerable strength on the day, contributing to the continued advance by the tech-heavy Nasdaq.
Most of the other major sectors also moved to the upside, with brokerage, airline and housing stocks posting notable gains.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan’s Nikkei 225 Index surged up by 1.8 percent, while China’s Shanghai Composite Index spiked by 5.7 percent.
The major European markets also showed strong moves to the upside on the day. While the U.K.’s FTSE 100 Index jumped by 2.1 percent, the German DAX Index and the French CAC 40 Index rallied by 1.6 percent and 1.5 percent, respectively.
In the bond market, treasuries moved modestly lower after turning higher over the course of the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.5 basis points to 0.684 percent.
A lack of major U.S. economic data may lead to light trading activity on Tuesday, although traders are likely to keep an eye on the latest coronavirus news.
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