Stocks closed sharply higher on Monday, led by strong gains in the tech sector, as Wall Street built on the momentum from last week's solid performance and shook off a continued rise in coronavirus cases.
There were a few reasons for the bullish lift to start the week:
"The economy is doing a lot better than most of the economists think," said Jeff Saut, chief investment strategist at Capital Wealth Planning, to CNBC's "Squawk Box" on Monday. "We may stall here for a while into the fall, into September, October, November, but I think you're going to get a rocket ship coming in the fall of this year...I think the S&P 500 is going to trade above 4,000."
Monday's gains came even as the number of coronavirus cases kept surging globally, raising concerns about the world economy and its recovery from the pandemic.
The World Health Organization said Saturday that more than 200,000 coronavirus cases were confirmed over a 24-hour span, a record. At a regional level, the biggest spike was seen in the Americas, where nearly 130,000 new cases were confirmed.
In the U.S., coronavirus-related hospitalizations grew in more than 20 states, including, Florida, Texas, Arizona and Georgia.
"We are currently experiencing a spike in Covid-19 cases, particularly in the sunbelt states that were in the vanguard of loosening social distancing restrictions to facilitate the reopening of their economies," said Marc Chaikin, CEO of Chaikin Analytics, in a post.
"That reopening momentum has been halted by the spike in Covid-19 cases and the temptation to translate this into a bearish outlook for stocks is strong," he added. "Fatalities have not spiked, however, but are a lagging indicator. Thus the next two weeks are critical for a number of reasons."
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