Stocks rose on Monday as Amazon shares led other major tech stocks higher. Traders also weighed the prospects of a potential coronavirus vaccine and more U.S. fiscal stimulus.
The S&P 500 advanced 0.8%, or 27.11 points, to 3,251.84, turning positive for 2020 with a 0.6% gain on the year. The Nasdaq Composite outperformed, rising 2.5%, or 263.90 points, to 10,767.09. The Dow Jones Industrial Average traded 8.92 points higher to 26,680.87, after being down more than 150 points earlier in the day.
Amazon rose 7.9% to post its best day since December 2018 after a Goldman Sachs analyst hiked his price target on the stock to $3,800 per share, the highest on the Street. Facebook and Netflix gained more than 1% each, while Apple and Alphabet gained 2.1% and 3.1%, respectively. Shares of Microsoft jumped 4.3%.
Monday's strong gain in tech shares came after the Nasdaq's first negative week in three, while beaten-down value names outperformed in that time period.
"If we lose [technology's] leadership in a meaningful way, I think it will adversely affect the overall market," said Douglas Busch, founder of ChartSmarter, in a note. "If the sector can just take a rest, and keep in the middle of the pack akin to a smart jockey that has a lot of horse under him in a thoroughbred race, then it will likely see a surge again into the fall."
Dow member Pfizer and BioNTech reported early positive data on a joint coronavirus vaccine candidate, saying the drug "elicited high, dose level-dependent SARS-CoV-2-neutralizing titers and RBD-binding IgG concentrations after the second dose." Pfizer shares rose 0.6% on the news while BioNTech traded 3.4% higher.
Another vaccine candidate from Oxford University and AstraZeneca showed a positive immune response in an early trial.
These announcements came after British pharmaceutical company Synairgen claimed that its new respiratory coronavirus treatment has reduced the number of hospitalized Covid-19 patients needing intensive care in a clinical trial. Its shares rose more than 350% on the European market.
Coronavirus cases have been rising at an alarming rate and now total more than 3.7 million in the U.S., according to Johns Hopkins University.
Traders also turned their eyes to Washington as lawmakers begin negotiations on new stimulus measures.
Earlier this year, President Donald Trump signed a stimulus package worth roughly $2 trillion which expanded unemployment benefits for those laid off during the pandemic. Among these expanded benefits, a $600-a-week check was included. However, these extra payments are set to expire later this month.
"There is a lot of uncertainty about the size and shape of the next bill, particularly on the consumer side," said Aneta Markowska, chief financial economist at Jefferies, in a note.
"We believe consensus expects a roughly $1-$1.5[T] package, so if the draft comes in on the high-end of that range, it would be seen as a positive surprise," Markowska added. "In light of the deteriorating growth momentum, it is highly unlikely that Republicans under-deliver, which means that risks are skewed to the high side."
—CNBC's Yun Li contributed reporting.
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