The predicted Wall Street rally surfaced Monday, with all three major indices soaring by more than 7% on heartening news the COVID-19 case toll seems to be slowing down in New York State and in a number of European countries such as Italy, Spain, France, and Portugal.
The Dow Jones Industrial Average rocketed upwards by 1,627.46 points, or 7.7%, at 22,679.99. The benchmark S&P 500 gained 7.0% to close at 2,663.68 while the NASDAQ Composite surged 7.3% to 7,913.24. The major indices rallied to their session highs in the final minutes of the trading day. The Dow briefly traded more than 1,700 points higher.
"We're running on raw optimism, maybe that's the best way to put it," said Randy Frederick, vice president of trading and derivatives at Schwab Center for Financial Research.
Leading the Dow's high flight was The Boeing Company that soared 19.8% to $148.77. Other high fliers were American Express (up 13.9% to $83.87) and Visa, Inc. (up 11.7% to $169.44).
The S&P 500's upward march was led by the information technology sector (up 8.7%), the utilities sector (up 7.9%) and consumer discretionary (up 7.7%). Retail stocks zoomed. Nordstrom Inc (up 24.1%), Kohl's Corporation (up 22.9%) and Macy's Inc (up 17.1%) led the upwards charge.
The S&P 500 has rebounded more than 21% from an intraday low on March 23. The Dow has rebounded over 24% since that time.
Analysts said investors were encouraged by data indicating a slowing down of COVID-19 cases in New York State over a three day period. Governor Andrew Cuomo, however, said it's still too early to tell if the data is the beginning of the eagerly anticipated flattening of the curve. Cuomo was referring to data from April 2 to 5, which showed 30,000 new cases on April 2; 32,100 cases the next day; then 33,260 cases and a new low of 28,200 Sunday. New York State also reported 594 new coronavirus deaths on Sunday compared to 630 on Saturday, which is the first daily decline in coronavirus-related deaths.
"Incoming data suggest NY State might peak sooner than Cuomo's optimistic case," said Tom Lee, head of research at Fundstrat Global Advisors, LLC. "With better visibility on the healthcare crisis in the US, particularly, on a potential to model a national peak, we believe buyers are now taking control."
"I am beginning to get optimistic," tweeted Bill Ackman, founder and CEO of hedge fund Pershing Square Capital Management on Sunday. "Cases appear to be peaking in NY. Almost the entire country is in shutdown."
The major indices posted their third weekly decline last week. The Dow tumbled 2.7%; the S&P 500 shed 2.1% while the NASDAQ yielded 1.7%. Despite Monday's rally, stocks remain deep in bear-market territory as the COVID-19 pandemic continues to shut down the global economy.
