Dow jumps 350 points as China encourages stock-buying to support virus recovery


US stocks jumped on Monday, following China’s stock market rally after a state-led newspaper said that it’s important to foster a healthy bull market after the coronavirus pandemic.

The front-page editorial in China’s Securities Times on Monday pushed the Shanghai Composite index up 5.7%, its biggest single-day increase since 2015. In addition, searches for how to open a stock account surged on Chinese social media following the editorial, according to Bloomberg.

Here’s where US indexes stood shortly after the 9:30 a.m. ET market open on Monday:

Read more:
GOLDMAN SACHS: Buy these 13 stocks that are poised to crush the market within the next 2 weeks as earnings season gets underway

The gains follow a strong June jobs report last Thursday, which showed American businesses added 4.8 million payrolls last month handily beating expectations of a 3 million payroll increase. Further, the unemployment rate fell to 11.1%, below the anticipated reading of 12.5%.

The so-called reopening trade gained momentum Monday, as investors continue to shrug off growing new coronavirus cases. Shares of airlines, cruise lines, and retailers were higher as the US companies continue to gradually expand operations.

Investors also kept a close eye on potential coronavirus treatments or vaccines. Shares of Becton Dickinson and Co. gained more than 4% after the company said the FDA has granted its rapid COVID-19 test emergency use authorization.

Read more:
Bank of America identifies 3 indicators that could make or break the stock market this summer – and warns they’re all deteriorating fast

“Investors trying to find a negative correlation between stock market performance and COVID-19 infections are having a difficult time,” said Hussein Sayed, chief market strategist at FXTM. “There doesn’t seem to be one at the moment and that’s evident in today’s robust rally.”

Warren Buffett’s Berkshire Hathaway on Sunday purchased Dominion Energy natural gas assets in a $US10 billion deal. It’s Buffett’s first major “elephant-sized” acquisition in years. Shares of Uber jumped after the company reportedly agreed to buy Postmates in a $US2.65 billion deal.

Still, experts maintain the US economy still is a long way from attaining pre-pandemic levels. Goldman Sachs cut its estimates for US gross domestic product this quarter, saying consumer spending may stall in the next few months.

Oil prices slid, with West Texas Intermediate crude falling as much as 1.2%, to $US40.15 per barrel. Brent crude, the international benchmark, hovered around little changed after climbing 2.1%, to $US43.71 per barrel, at intraday highs.

Read more:
The most accurate tech analyst on Wall Street says these 6 stocks have potential for huge gains as they transform the sector