Recovery Hopes Boost Wall Street Despite Protests

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2020-06-02 HKT 04:42

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  • Wall Street posted modest gains on Monday despite violent protests across the US. File image: Shutterstock

    Wall Street posted modest gains on Monday despite violent protests across the US. File image: Shutterstock

US stocks posted gains on Monday as signs of US economic recovery helped offset jitters over increasingly violent social unrest amid an ongoing pandemic and rising Sino-US tensions.

All three major stock indexes began the month with gains of less than 1 per cent on the heels of a strong May rally.

Market leaders Facebook, Apple and Amazon provided the biggest lift to the S&P 500 and the Nasdaq, while Boeing gave the Dow its biggest boost.

"Certainly the pace of the stock market recovery can't continue at the pace it has been," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. "I'm stunned at how well the market's been doing."

The White House called for "law and order" after six nights of widespread, violent demonstrations triggered by the death of George Floyd at the hands of police, even as the country reels from the economic effects of pandemic-related lockdowns.

"Most investors are saying (the protests) aren't going to destroy the economy," Nolte added. "It's a roadblock but it's not as big as a pandemic."

The unrest has prompted retailers such as Target and Walmart to shutter a portion of their stores, while Amazon has scaled back deliveries.

Further weighing on sentiment, Beijing ordered state-owned firms to halt purchases of US soybeans and pork, in retaliation for US President Donald Trump's announcement that he would end special treatment for Hong Kong.

But economic data boosted investor sentiment, with the Institute for Supply Management's (ISM) purchasing managers' index (PMI) showing the contraction of factory activity was slowing.

The Dow Jones Industrial Average rose 0.36 percent, to 25,475, the S&P 500 gained 0.38 percent, to 3,056 and the Nasdaq Composite added 0.66 percent, to 9,552.

Of the 11 major sectors in the S&P 500, all but healthcare ended the session in positive territory.

Pfizer Inc fell 7.1 percent after the drugmaker's breast cancer treatment was deemed unlikely to meet the main goal of a late-stage study.

Gilead Sciences Inc slid 3.4 percent following mixed results in a late-stage study of its Covid-19 drug candidate, remdesivir. (Reuters)