NEW YORK: US stocks rebounded on Monday as investors shrugged off surging Covid-19 cases and US-China tensions, betting instead on more stimulus to revive a battered domestic economy ahead of a week packed with quarterly earnings reports.
Still, safe haven assets were in demand with gold prices at record levels amid concerns over a diplomatic row between the United States and China, escalating Covid-19 cases in southern and western US states and an unexpected rise in US jobless claims last week.
Trillions of dollars in fiscal and monetary stimulus have been pivotal in bringing the S&P 500 to within 5% of its record high hit in February.
Expectations are running low for any major announcements at a two-day Federal Reserve meeting this week, but policymakers are likely to lay the groundwork for more action in September or in the fourth quarter, analysts said.
Investors are also keeping a close watch on progress over the next round of government aid ahead of enhanced unemployment benefits set to expire on Friday.
US Senate Republicans on Monday are expected to unveil a $1 trillion coronavirus aid package hammered out with the White House, which will now be negotiated with Democrats.
Apple Inc, Amazon.com Inc, Facebook Inc and Alphabet Inc rose between 1.0% and 1.9%, and were among the top boosts to the S&P 500 and Nasdaq. The four FAANG companies are among the 189 S&P 500 firms expected to report results this week.
"It's probably going to be the biggest week of the year in terms of what people are expecting due to the impact from the coronavirus outbreak," said Brian Pirri, principal at New England Investment and Retirement Group in Boston.
Technology, consumer discretionary and materials sectors rose over 1.0% each. Bank stocks, which tend to weaken when the economic outlook darkens, lagged with their 1.4% fall.
At 10:56 a.m. ET, the Dow Jones Industrial Average was up 134.48 points, or 0.51%, at 26,604.37, the S&P 500 was up 20.35 points, or 0.63%, at 3,235.98. The Nasdaq Composite was up 125.71 points, or 1.21%, at 10,488.89.
Moderna Inc jumped 7.6% as it started a US government-backed late-stage trial to assess its Covid-19 vaccine candidate in about 30,000 adults.
Hasbro Inc dropped 6.5% after the toymaker missed quarterly results estimates, hit by production shutdowns due to coronavirus lockdowns.
Walgreens Boots Alliance Inc fell 2.7% on news its Chief Executive Officer Stefano Pessina has decided to step down.
Advancing issues outnumbered decliners for a 1.60-to-1 ratio on the NYSE and a 1.55-to-1 ratio on the Nasdaq.
The S&P index recorded eight new 52-week highs and no new low, while the Nasdaq recorded 44 new highs and 15 new lows.