Share benchmarks climbed on Monday, as investors weighed the rise in coronavirus infections with the likelihood of future lockdowns and the continuation of easy monetary policy.
The Dow Jones Industrial Average gained 0.8% in early New York trading. The gauge of blue-chip stocks shed 3.3% last week, putting it on track for a retreat this month.
The S&P 500 advanced 0.5% and the Nasdaq Composite Index rose 0.2%. The pan-continental Stoxx Europe 600 edged up 0.1%, while most major Asian equity benchmarks ended the day lower.
Over the weekend, coronavirus cases world-wide passed 10 million, with more than 500,000 deaths. Authorities in Florida, Texas, California and Arizona, which have accounted for much of the recent rise in U.S. cases, have imposed new restrictions and retreated on reopening plans.
“Markets are still wrestling between new cases, and extra liquidity” flowing into markets from central banks’ and government’s stimulus programs, said Edward Park, deputy chief investment officer at Brooks Macdonald. “At the end of last week, we saw the new cases winning out.”
A key measure of turbulence in U.S. stocks, the Cboe Volatility Index, edged higher for a second day, suggesting that investors will continue to be jittery.
“There’s still a high level of volatility, which shows that the degree of fear is still very elevated,” said Sebastien Galy, a macro strategist at Nordea Asset Management. “I think we’re in the last wave of this relief rally, caused by central banks doing their jobs and passing a lot of liquidity into the market.”
Large fund managers will also face pressure to rebalance their portfolios as the end of both the month and the quarter approaches, according to Steen Jakobsen, chief investment officer and chief economist at Saxo Bank. Asset managers are likely to try to lock in the sharp gains posted in U.S. stock markets in April and May, he said.
Ahead of the New York opening bell, Facebook and Twitter shares dropped after more brands said over the weekend that they would stop advertising on the social-media platforms, citing hate speech and divisive content. Facebook declined 3.5% and Twitter traded down 2.7%.
Boeing climbed 5.6% after U.S. air-safety regulators said they would begin key tests as early as Monday for a plane model that has run into technical difficulties in recent months, resulting in two crashes. This will be an important milestone to get the type of plane back into use after the fleet was grounded for over a year.
The yield on the 10-year U.S. Treasury note, seen as a haven, ticked up to 0.652%, from 0.636% Friday. Yields move in the opposite direction of bond prices.
Investors worry that any new wave of coronavirus cases will hold back a global economic recovery.
Photo: jeon heon-kyun/Shutterstock/european pressphoto agencyIn commodities, the main benchmark for U.S. crude oil prices erased earlier losses to tick 1% higher. Brent crude, the international benchmark, gained 0.8%.
The British pound weakened 0.8% against the euro, trading at 1.0911 euros per pound, as investors grew jittery about the Brexit talks that are set to resume this week. The U.K. could walk away without a meaningful trade deal with the European Union at the same time that its economy is being rocked by the pandemic, said Kit Juckes, a macro strategist at Société Générale.
“Sterling’s moved down a level with concerns about politics, Brexit, the economy: we’re getting very close to our all-time lows,” Mr. Juckes said. “This cocktail of possible outcomes is really unhelpful with two major downside risks.”
In European equities, oil major BP rose 3.6% after it said it would sell its petrochemicals business for $5 billion to Ineos.
In Asia, Hong Kong’s Hang Seng Index fell about 1%, while the Shanghai Composite pulled back 0.6%. Japan’s Nikkei 225 index declined around 2.3%.
Rising infections in U.S. states served “as a wild card for markets, which needs to be monitored carefully,” according to Eli Lee, head of investment strategy at Bank of Singapore. “A persistent rise in infection cases would form a major impediment to easing of containment measures and the momentum of the economic recovery.”
—Anna Isaac contributed to this article.
Write to Anna Hirtenstein at anna.hirtenstein@wsj.com and Joanne Chiu at joanne.chiu@wsj.com
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