USA TODAY International Edition
Dow Jones rebounds to gain 580 points
Selloff helps recovery after 700- point drop
Stocks clawed back gains Monday following last week’s selloff as investors weighed a resurgence in coronavirus cases and the possibility of further lockdowns with hopes of more monetary stimulus.
The Dow Jones industrial average soared 580.25 points, or 2.3%, to 25,595.80, kicking off a shortened holiday trading week with a bang, following a more than 700- point drop Friday. The Standard & Poor’s 500 rose 1.5% to 3,053.24, after shedding more than 2% last week. Despite the steep losses, the S& P 500 index is still on pace for its best quarter since 1998.
Gains for Boeing and Apple, in particular, helped to lift Wall Street indexes.
On Monday, Dow component Boeing rallied 14% after the aerospace giant received clearance from the Federal Aviation Administration to begin test flights for its grounded 737 MAX after two fatal crashes. Test flights could begin as soon as Monday.
Apple added 2.3% as customers keep buying its products regardless of whether they’re quarantined.
Facebook added 2.1%, recouping early losses as it deals with a defection of advertisers protesting hate speech spreading through the social network. Ford, Adidas and Denny’s became the latest big companies to say they will pause its advertising on social media.
Global markets elsewhere were subdued as rising virus cases caused some governments to backtrack on reopening their economies, or to warn they might have to. The worry is that the worsening levels could choke off the budding improvements in the economic activity, even with the Federal Reserve and other central banks pumping unprecedented amounts of aid into the economy.
On Tuesday, Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin are scheduled to testify before the House Financial Services Committee about the pandemic response.
Investors are looking ahead to the June unemployment report, out Thursday instead of Friday due to the July 4 holiday. Economists forecast the Labor Department will report a 3 million increase in jobs after an unexpected 2.5 million jump in payrolls a month earlier, according to Bloomberg.
Although fewer Americans are seeking unemployment benefits, the number who need help remains high as 47 million Americans have made initial jobless benefits claims in just 14 weeks.
“While the latest jobless claims data showed some stability, the overall picture remains bleak,” Peter Cardillo, chief market economist at Spartan Capital Securities, said in a note. “The drop in the number of workers receiving benefits is encouraging, but the total number of workers still on the receiving line is indicative of a very poor labor market ahead.”