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Investing.com – The Dow continued to trade close to session highs on Monday as sentiment was boosted by signs the Covid-19 outbreak could be peaking New York state, the epicenter of the virus in the U.S.
The Dow rose 5.93%, or 1,248 points. The S&P 500 added 5.82% and the Nasdaq Composite gained 5.82%.
The rate of daily new infections and fatalities in New York had held relatively flat for a second-straight day, New York Gov. Andrew Cuomo said on Monday. The update boosted optimism the lockdown measures imposed across New York and other states, under similar restrictions, were starting to take shape.
Cuomo warned, however, that now was “not the time to be lax,” and said he would extend the statewide stay-at-home order through April 29.
Investor optimism that a peak in Covid-19 infections may be on the horizon comes as Italy and Spain also showed signs of slowing fatalities and infections.
With hopes running high that the pandemic may be curbed sooner rather than later, virus-sensitive corners of the market like cruise liners caught a strong bid.
Royal Caribbean Cruises (NYSE:RCL) was up 19%, while Carnival (NYSE:CCL) and Norwegian Cruise (NYSE:NCLH) climbed 16%.
The broader rally on Wall was led by a sharp uptick in defensive sectors.
CenterPoint Energy (NYSE:CNP), Pinnacle West Capital (NYSE:PNW), Ventas (NYSE:VTR) and Simon Property (NYSE:SPG) rallied by double-digit percentages, with the dearth in yields seemingly attracting investors to utilities and real estate, both of which tend to do well in a falling interest rate environment.
A potential wave of fresh stimulus into the economy from the Federal Reserve also supported sentiment, with The Wall Street Journal reporting the U.S. central bank and the U.S. Treasury are set to launch a new program to buy the loans that banks have made to small businesses as part of the recently introduced lending program.
The $350 billion lending program was launched on Friday, as part of the $2 trillion coronavirus rescue package that was rolled out in March.
