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Monday, Aug 02, 2021

Nasdaq hits record high as virus hopes grow

Nasdaq hits record high as virus hopes grow

The Nasdaq hit a record high close on Monday, becoming the first of the major indexes to confirm a new bull market, and the Dow and S&P 500 jumped as expectations for a swift recovery from a coronavirus-driven downturn increased.
The S&P 500 ended in positive territory for the year to date.

Rising technology and communication stocks have driven gains in the Nasdaq, which confirmed a new bull market just 16 weeks after coronavirus fears crushed stocks and pushed the U.S. economy into recession.

The Nasdaq has climbed 44.7 per cent from its March 23 bottom. A bull market is generally considered to be a rise of more than 20 per cent from the low point.

A closely watched monthly jobs report on Friday showed an unexpected fall in unemployment rate, bolstering views that the worst of the economic damage from the virus outbreak was over.

"It's optimism surrounding the reopening of the global economy, and the likely confirmation that the US economy will experience a V-shaped recovery in the second half," said Sam Stovall, chief investment strategist at CFRA Research in New York.

Stocks added to gains late in the session after the US Federal Reserve eased the terms of its "Main Street" lending programme.

The energy sector climbed the most among the 11 major S&P sectors, rising 4.3 per cent, as major oil producers agreed over the weekend to extend a deal on record output cuts.

The Dow Jones Industrial Average rose 1.7 per cent to 27,572, the S&P 500 gained 1.20 per cent, to 3,232 and the Nasdaq Composite added 1.13 per cent, to 9,925.

Investors will also focus this week on the Fed's two-day policy meeting, ending on Wednesday, where the jobs report will most likely be discussed.

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