Stocks shrug off renewed worries over coronavirus

U.S. stocks finished higher Monday after a wobbly start to the week, driven by high-flying technology companies as investors shook off concerns over new coronavirus infections worldwide.

The Dow Jones Industrial Average climbed 153.50 points, or 0.59%, to close at 26,024.96, recouping losses after falling about 200 points following the opening bell. The Standard & Poor’s 500 rose 0.7% to end at 3,117.86, after the broad index notched its fourth weekly gain in the past five on Friday.

Technology companies accounted for most of the gains in the S&P 500 index, outweighing losses in health care, financial and other sectors. Shares of iPhone maker Apple and software giant Microsoft both jumped more than 2.5% apiece, while stocks tied to the economy reopening fell including airlines and casinos.

Gains in technology shares propelled the Nasdaq Composite to a record, advancing 1.1% to finish at 10,056.47. Apple shares touched an all-time high after it unveiled new software updates for iPhones, iPads, Apple Watches and Mac computers at its annual WorldWide Developers Conference.

Shares of American Airlines dropped 6.8% after the company said Sunday it was seeking $3.5 billion in new financing as it faces travel restrictions.

The price of gold rose, a sign of caution in the market. Bond yields were mixed.

Stocks have been trading choppy in recent weeks on growing fears of a second wave of infections after rising more than 40% from March lows on hopes the worst of the pandemic was over. Investors have grown optimistic about a recovery following a massive stimulus package from Congress and unprecedented moves from the Federal Reserve to help support the economy.

Investors are hoping for another round of fiscal stimulus from Washington to help the economy through the reopening, but that is unlikely to happen before Congress goes on its July 4 recess.

Analysts at Goldman Sachs expect the potential risk of a second wave and the upcoming U.S. presidential election in November will limit a significant rise in stock exposure in the near term, they said. The bank projects that the S&P 500 index will trade in a range of 2,750 to 3,200 for the remainder of 2020, with a year-end target of 3,000.

“Periods of elevated policy uncertainty have generally coincided with lower-than-average equity allocations during the past 30 years,” analysts at Goldman Sachs said in a note.

Investors will get another look at the health of the economy later this week when the government issues data on consumer spending and weekly unemployment aid applications. On Tuesday, the Commerce Department is set to report new-home sales figures for May.

Separate data released Monday showed sales of previously occupied homes plunged 9.7% in May, according to the National Association of Realtors. The May slide pushed sales down to a seasonally adjusted annual rate of 3.91 million, the slowest pace since 2010. Still, the median home price rose 2.3% from a year ago, a sign that demand could pickup up in coming months.

Financial markets around the world paused Monday as the global virus tally approached 9 million. Great uncertainty remains over whether countries that have been relaxing pandemic-fighting restrictions on travel and business might end up reimposing broader controls that would slow a recovery from the worst global downturn since the Great Depression in the 1930s.

Even if widespread stay-at-home orders don’t happen, the fear is that scared shoppers may still shy away from stores and businesses may pull back on their own spending, analysts caution.

“Public health leaders across the country are playing an extended game of Whack-a-Mole, where clusters of the virus will pop up. They do their jobs and control the spread, only to have new cases pop up elsewhere,” analysts at Raymond James said in a note. “While we haven’t seen a corresponding uptick in deaths, the next 10 days will tell us if one will occur.”