Wall Street closes higher as recovery signs soothe protest, pandemic worries

Wall Street closes higher as recovery signs soothe protest, pandemic worries

U.S. stocks struggled for direction on Monday as investors weighed prospects of a post-pandemic economic recovery against protests across the country over race and an ongoing standoff between Washington and Beijing.

The spread of the coronavirus disease (COVID-19) in New York
A trader adjusts his mask as he works on the floor of the New York Stock Exchange as the outbreak of the coronavirus disease (COVID-19) continues in the Manhattan borough of New York, U.S., May 28, 2020. REUTERS/Lucas Jackson

NEW YORK: U.S. stocks posted gains on Monday as signs of U.S. economic recovery helped offset jitters over increasingly violent social unrest amid an ongoing pandemic and rising U.S.-China tensions.

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

"Certainly the pace of the stock market recovery can't contnue 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. It's truly a head-scratcher."

The White House called for "law and order" as U.S. cities were looted and smoldering 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 Corp and Walmart Inc to shutter a portion of their stores, while Amazon.com has scaled back deliveries.

Further weighing on sentiment, China has ordered state-owned firms to halt purchases of U.S. soybeans and pork, in retaliation for President Donald Trump's announcement that he would end special treatment for Hong Kong following China's move to tighten security measures in the territory.

But economic data gave a boost to investor sentiment, with the Institute for Supply Management's (ISM) purchasing managers' index (PMI) showing the contraction of factory activity was slowing, and a decline in construction spending was not as steep as economists feared.

"The numbers are still poor, but as long as they continue to improve there's reason for optimism," Nolte said.

A fuller picture of the economic damage wrought by pandemic-related lockdowns is expected on Friday, when the Labor Department's jobs report is seen showing a drop of 8 million jobs and an unemployment rate sky-rocketing to 19.7per cent.

Unofficially, the Dow Jones Industrial Average rose 0.37per cent to end at 25,476.05 points, while the S&P 500 gained 0.38per cent, to 3,055.75. The Nasdaq Composite climbed 0.65per cent to 9,551.67.

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

Gilead Sciences Inc slid following mixed results in a late-stage study of its COVID-19 drug candidate, remdesivir.

Meanwhile, rivals firms CTI Biopharma Corp and Proteostasis Therapeutics Inc advanced following reports that their potential COVID-19 treatments showed promise.

Shares of cosmetics company Coty Inc jumped after the appointment of Chairman Peter Harf as its new chief executive officer.

(Reporting by Stephen Culp; Editing by Cynthia Osterman)

Source: Reuters

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