Dow jumps 320 points as China encourages stock-buying to support virus recovery
- US stocks jumped on Monday following a rally in China after an editorial in a state-run newspaper encouraged people to buy stocks to support the recovery from the coronavirus crisis.
- The gains followed a strong June jobs report last week that said American businesses added 4.8 million payrolls last month, handily beating expectations of a 3 million increase.
- Warren Buffett’s Berkshire Hathaway on Sunday purchased Dominion Energy’s natural-gas assets in a $10 billion deal. It was Buffett’s first major “elephant-sized” acquisition in years.
- Read more on Business Insider.
US stocks jumped on Monday following a stock-market rally in China after a state-run newspaper published an editorial saying it was important to foster a healthy bull market in the wake of the coronavirus pandemic.
The front-page editorial in the China Securities Journal on Monday helped push the Shanghai composite index up 5.7%, its biggest single-day increase since 2015. In addition, searches for how to open a stock account surged on social media in China following the editorial, according to Bloomberg.
Tech stocks led the market higher, with shares of Amazon surging nearly 4%, passing $3,000 for the first time ever. At the same time, shares of Tesla jumped more than 9% to an all-time high on Monday following better-than-expected deliveries data and analyst upgrades.
Here’s where US indexes stood shortly at 12:00 p.m. ET on Monday:
- S&P 500: 3,172.40, up 1.36%
- Dow Jones industrial average: 26,142.56, up 1.3% (315 points)
- Nasdaq composite: 10,428.44, up 1.6%
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The gains followed a strong June jobs report that said American businesses added 4.8 million payrolls last month, handily beating expectations of a 3 million increase. The unemployment rate fell to 11.1%, below the anticipated reading of 12.5%.
The so-called reopening trade gained momentum on Monday as investors continued to shrug off increases in new coronavirus cases. Shares of airlines, cruise lines, and retailers rose as US companies gradually expand operations.
Investors also kept a close eye on experimental coronavirus treatments and vaccines. Shares of Becton, Dickinson and Co. gained more than 4% after the company said the Food and Drug Administration granted an emergency use authorization for its rapid COVID-19 antigen test.
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“Investors trying to find a negative correlation between stock market performance and COVID-19 infections are having a difficult time,” said Hussein Sayed, the chief market strategist at FXTM. “There doesn’t seem to be one at the moment and that’s evident in today’s robust rally.”
Warren Buffett’s Berkshire Hathaway on Sunday purchased Dominion Energy’s natural-gas assets in a $10 billion deal — it was Buffett’s first major “elephant-sized” acquisition in years. Shares of Uber jumped after reports said the company agreed to buy Postmates in a $2.65 billion deal.
Still, experts have maintained that the US economy still is a long way from pre-pandemic levels. Goldman Sachs cut its estimates for US gross domestic product this quarter, saying consumer spending might stall in the next few months.
Oil prices slid, with West Texas Intermediate crude falling as much as 1.2%, to $40.15 per barrel. Brent crude, the international benchmark, was little changed after climbing 2.1%, to $43.71 per barrel, at intraday highs.
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