S&P 500, Nasdaq at record highs on Covid-19 treatment hopes

The S&P 500 and Nasdaq scaled new highs on Monday as a US approval for the emergency use of blood plasma in Covid-19 patients lifted treatment hopes and spurred bets of a quicker economic recovery.

The US Food and Drug Administration's decision to use antibody-rich plasma from recovered patients was hailed by President Donald Trump, 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.

“The market is responding favourably to the possibilities of being able to inject antibodies as another form of combating the virus,” said Sam Stovall, chief investment strategist at CFRA Research in New York.

At 12:34 p.m. ET, the Dow Jones Industrial Average was up 255.47 points, or 0.91%, at 28,185.80, the S&P 500 was up 23.11 points, or 0.68%, at 3,420.27. The Nasdaq Composite was up 53.40 points, or 0.47%, at 11,365.20.

Advancing issues outnumbered decliners by a 2.64-to-1 ratio on the NYSE and by a 1.17-to-1 ratio on the Nasdaq.

The S&P index recorded 45 new 52-week highs and no new low, while the Nasdaq recorded 76 new highs and 33 new lows

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

The push for plasma treatment and the speeding up of a vaccine candidate came in the run up to the Republican National Convention, which began on Monday. President Trump secured sufficient votes to lead his party for four more years, kicking off the final sprint to Nov. 3 Election Day.

Ahead of the 4-for-1 share split on Friday, Apple Inc gained 2% to cross $500 per share for the first time, providing the biggest boost to the three main indexes.

Economically-sensitive energy, financials and materials, which are lagging the broader market this year, advanced more than any other major S&P sector.

In the previous session, the S&P 500 and Nasdaq closed at record levels, wrapping up four weeks of gains on bets that technology focused companies will emerge stronger and the economy will return to growth on 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's annual symposium, where he will talk on the monetary policy framework review.