Stocks soar anew on treatment optimism
U.S. stocks rose to record highs and bonds fell on signs that the Trump administration may fasttrack vaccines and treatments for coronavirus.
The S&P 500 notched another all-time high as optimism mounted that the virus wouldn’t hamper growth. The Nasdaq Composite also closed a record for a second consecutive session. Companies that benefit from a more robust economic restart led the gains.
Carnival. and United Airlines more than 9 percent, while Kohl’s and Gap jumped at least 7 percent. Casinos, carmakers and homebuilders joined the rally. Of the 11 S&P industry sectors, only health care finished lower.
“The market is now working out well into next year — expecting a vaccine or several, a couple of important therapeutic remedies as well, probably continued government aid, and people going back to work and children going back to school,” said David Rainey of the Hennessy Focus Fund.
Market sentiment was supported by news that the Food and Drug Administration is working to expand access to a virus treatment involving blood plasma from recovered patients. The plasma may help people battling the disease, though health officials say the therapy is still experimental.
Such hopes helped invigorate shares of industries that have been badly beaten down by what’s become the new normal of pandemic life. Airlines climbed, for example, amid the possibility that people may feel safe enough to travel again in the future. Delta Air Lines rose 9.3 percent, and American Airlines added 10.5 percent.
Separately, the Financial Times reported that the Trump adminissurged tration is considering whether to bypass regulatory standards to accelerate an experimental vaccine.
Treasury yields rose and the dollar strengthened, while gold traded near $1,950 an ounce.
One winner of the new normal, Zoom Video Communications, stumbled. Its shares fell 2.6 percent after it reported partial outages in its Zoom Meetings service, which has become the default way for classrooms and businesses to communicate.
Elsewhere, Asian stocks got a boost after a report that White House officials have reassured American businesses that a ban on its WeChat app won’t be as broad as feared. WeChat owner Tencent Holdings jumped the most in a month, gaining $37 billion.
Investors will be focused this week on the Federal Reserve’s annual Economic Policy Symposium, typically held in Jackson Hole, Wyo.
Meanwhile, storms Marco and Laura are rolling toward the Gulf Coast, where they may come ashore as hurricanes as soon as Monday. Almost 58 percent of crude output in the Gulf of Mexico production has been shut down as the threat prompted evacuations of offshore energy platforms.