Nasdaq Composite jumps for a sixth day, longest winning streak this year

Expect sideways market until treatment or vaccine breakthrough: Strategist
Expect sideways market until treatment or vaccine breakthrough: Strategist

The Nasdaq Composite climbed for a sixth straight session on Monday as shares of major technology companies added to their comeback rally. The strength in big tech also lifted the S&P 500 to the flat line from losses earlier in the day.

The tech-heavy index jumped 0.7%, or 71.02 points, to 9,192.34, marking its longest winning streak since an 11-day run back in December. For the year, the Nasdaq was up about 2.4% and traded just 6% below its record high set in February. 

The S&P 500 was up just 0.39 points to 2,930.19 after falling as much as 0.9% to start the session. The Dow Jones Industrial Average traded 109.33 points lower, or 0.4%, to 24,221.99.

Amazon, Apple and Microsoft all rose more than 1%, posting their sixth consecutive day of gains. Netflix jumped 1.4%, while Google parent Alphabet climbed 1.4%.

"The COVID-19 pandemic has reinforced the essential role that technology plays for businesses and consumers, and stoked expectations that the recession could see many of the largest growth companies become even more dominant," said Salvatore Ruscitti, U.S. equities strategist at MRB Partners. 

However, investors remained jittery about reopening the economy too soon, capping the broader market's upside momentum after South Korea warned of a new cluster of cases involving night clubs. Singapore and Japan also confirmed new cases. The World Health Organization said that countries who have relaxed lockdown measures have seen a spike in coronavirus cases. 

"I think this part of the bounce was easy to forecast, I think what happens from here again depends a lot on Covid stuff," said Paul Tudor Jones, founder of Tudor Investment Corp., on CNBC's "Squawk Box." "There'll be a shift in focus from liquidity issues somewhere down the line to solvency issues. If we don't find a vaccine or a cure, if we don't find a much better way of testing at scale ... then I think the market's going to have a much more difficult time."

More than 4.1 million coronavirus cases have been confirmed globally, with 1.3 million of those infections coming from the U.S, according to data from Johns Hopkins University

The major averages were coming off their first weekly advance in three weeks, with the S&P 500 gaining 3.5% last week. On Friday, investors shrugged off the biggest one-month job losses on record.

"The world very much remains on the path to reopening, a process that will accelerate over the coming weeks," said Adam Crisafulli, founder of Vital Knowledge, in a note. He added, however, the S&P 500 is still overbought at current levels even as expectations of a gradual resumption of economic activity continue to increase.

"There will be a reckoning around the reopening and linearity narratives (i.e. both are too sanguine right now)," Crisafulli wrote.

The S&P 500 has rallied more than 33% since hitting an intraday low on March 23. That surge has been led largely by mega-cap tech stocks such as Facebook, Amazon, Apple, Netflix, Alphabet and Microsoft. Those stocks have all soared more than 20% since late March. Chipmaker Nvidia hit an all-time high on Monday, bringing its 2020 gains to more than 37%.

Stocks that would benefit from the economy reopening are also up sharply since then. MGM Resorts has soared more than 70% while Disney is up about 27% in that time.

But those stocks were down Monday. Disney lost 1.2%. MGM fell 6.0%. United Airlines lost 5.7%.

Despite the market's strong performance at the index level, Dan Russo of Chaikin Analytics thinks that under the surface, "the real story has been unfolding."

"Over the past three months, which roughly lines up with the top in the S&P 500, it is the economically sensitive cyclical sectors of the market that have lagged," the firm's chief market strategist said in a post, highlighting the performance of energy, financials and industrials over that time period. All three of those sectors are down more than 24% over the past three months.

Apple said Friday it will start to reopen U.S. stores this week. The stores, Apple said, will have temperature checks and will limit the number of customers inside the store at once.

— CNBC's Yun Li contributed to this report.

Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.

Here's what the average investor should be doing during the coronavirus economic crisis
The average investor should be doing this during the coronavirus economic crisis