Monday's Stock Market Close: US Equities Rise Despite Continuing US Street Violence, Tensions With China

U.S. stocks closed moderately higher on Monday as traders appeared to have shrugged off tensions with China over Hong Kong and continuing street riots in the U.S. – while pinning their hopes on a quick reopening of the economy.

The Dow Jones Industrial Average gained 91.91 points to 25,475.02, while the S&P 500 rose 11.42 points to 3,055.73 and the Nasdaq Composite Index advanced 62.18 points to 9,552.05.

Monday’s volume on the New York Stock Exchange totaled 4.17 billion shares with 2,236 issues advancing, 50 setting new highs, and 739 declining, with five setting new lows.

Active movers were led by Allied Esports Entertainment Inc. (AESE), Pfizer Inc. (PFE) and General Electric Co. (GE)

States across the country were reopening their economies, while protests against the killing by police of unarmed black man George Floyd swept across dozens of cities.

Market sentiment was also weighed down by increasing hostility between the U.S. and China after President Donald Trump said he would revoke Hong Kong’s special trade status in response to Beijing’s controversial new security law for the city-state.

“Equity markets continue to display remarkable resilience in the face of a constant barrage of troubling developments, with investors continuing to focus on the positive signs of reopening,” said Mark Hackett, chief of investment research at Nationwide.

The Institute for Supply Management said on Monday that its index of national factory activity edged up to 43.1 in May from 41.5 in April, which itself was an 11-year low.

The Commerce Department said that U.S. construction spending fell 2.9% in April, after a flat reading in March.

The Caixin/Markit Manufacturing Purchasing Manager’s Index – a survey of manufacturing activity in China – amounted to 50.7 for May, indicating expansion.

“Nothing that has happened since the market closed on Friday has been market-positive,” said Art Hogan, chief market strategist at National Securities. “When you think… we’re beginning to take U.S.-China tensions seriously and you add on to that the massive amount of disruption going on in almost every major city in the country right now, none of that could be seen as market positive. At the levels we’re at, I wouldn’t be surprised to see the market take a pause and pull back.”

More than 6 million cases of coronavirus have been confirmed around the world, including more than 1.7 million in the U.S.

Peter Berezin, chief global strategist at BCA Research, wrote: “The main downside risk facing stocks is a second wave of the disease. If fears of a new outbreak were to escalate, risk assets would suffer.”

Overnight in Asia, markets finished higher. China’s Shanghai Composite gained 2.21%, Hong Kong’s Hang Seng jumped 3.36% and Japan’s Nikkei-225 rose 0.84%.

In Europe markets finished mixed, as Britain’s FTSE-100 rose 1.48%, France’s CAC-40 gained 1.43% and Germany’s DAX dropped 1.65%.

Crude oil futures edged up 0.17% at $35.55 per barrel, Brent crude gained 0.63% at $38.56. Gold futures edged down 0.06%.

The euro edged up 0.27% at $1.1134 while the pound sterling rose 1.21% at $1.2498.

The yield on the 10-year Treasury rose 2.16% to 0.662% while yield on the 30-year Treasury jumped 3.41% to 1.455%.