S&P 500, Nasdaq At All-Time Highs on COVID-19 Treatment Hopes

The S&P 500 and the Nasdaq scaled new heights on Monday, boosted by technology mega-caps and U.S. approval for the emergency use of blood plasma in treating COVID-19 patients.

The moves come ahead of the Republican National Convention, where President Donald Trump will be nominated to lead his party for four more years, kicking off the final sprint to Nov. 3 Election Day.

The U.S. Food and Drug Administration’s decision to use antibody-rich plasma from recovered patients was hailed by Trump and came a day after he accused it of impeding the rollout of treatments for political reasons.

The World Health Organization, however, was cautious about endorsing the treatment, citing “low quality” evidence that it works.

Apple Inc gained 2.7% to cross $500 per share for the first time, providing the biggest boost to the three main stock indexes.

Facebook Inc, Amazon.com Inc, Microsoft Corp and Google-parent Alphabet Inc that along with Apple represent nearly a quarter of the S&P 500’s market capitalization, climbed between 0.9% and 3.5%.

Consumer discretionary, technology and communication services led gains among the major S&P sectors.

Further aiding sentiment was a report the Trump administration is considering fast-tracking an experimental COVID-19 vaccine being developed by AstraZeneca Plc and Oxford University for use in the United States before election.

“Everyone is focused on the same thing and that’s eradicating the virus, whether it’s through treatment, but preferably from vaccines,” said Thomas Hayes, managing member at Great Hill Capital LLC in New York.

“That is the key to unlocking the economy because all the timulus aid and liquidity is there. We just have to enable people to get back to normalcy and the global economy can boom.”

The S&P 500 and the Nasdaq closed at record levels on Friday, wrapping up four weeks of gains on bets that technology focused companies will emerge stronger from the pandemic and the economy will return to growth on continued monetary and fiscal support.

The Dow, however, is still about 5% below its February peak.

Meanwhile, the next phase of coronavirus government aid remained elusive as top Democrats and Republicans continued to blame each other for stalled talks on the legislation.

A key event this week would be the address by Federal Reserve Chair Jerome Powell at the Kansas City Fed Jackson Hole symposium, where he will talk on the monetary policy framework review.

At 9:46 a.m. ET, the Dow Jones Industrial Average was up 127.30 points, or 0.46%, at 28,057.63, the S&P 500 was up 26.80 points, or 0.79%, at 3,423.96. The Nasdaq Composite was up 146.54 points, or 1.30%, at 11,458.34.

Advancing issues outnumbered decliners by a 2.12-to-1 ratio on the NYSE and by a 1.43-to-1 ratio on the Nasdaq.

The S&P index recorded 39 new 52-week highs and no new low, while the Nasdaq recorded 61 new highs and 13 new lows.

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