By Yasin Ebrahim
Investing.com – The Nasdaq closed at a record high on Monday as mega-cap tech stocks continued to sparkle despite a rise in Covid-19 cases nationwide that threatened the pace of economic recovery.
The S&P 500 gained 1.60%, the Nasdaq Composite ended 2.21% and the Dow Jones Industrial Average rose 1.78%.
Tech was among the biggest gainers, with FANG and chip stocks driving the move higher.
Netflix (NASDAQ:NFLX) rose more than 3.5% even as Imperial Capital downgraded the streaming stock to inline from outperform on worries there is "modest" room for upside given the stocks surge in recent months.
In chip stocks, Xilinx (NASDAQ:XLNX) surged 6% after Goldman Sachs (NYSE:GS) analysts reiterated a buy rating on the stock and a price target of $113, noting the company's diversified end-market product mix.
Florida and Texas reported new single-day records for infections over the weekend, as coronavirus outbreaks across pockets of the U.S. showed little sign of abating.
Infections now total nearly three million nationwide, with 132,000 dead.
The surge in cases comes as data showed the U.S. services sector, which is responsible for the bulk of economic growth, rebounded strongly last month, renewing investor expectations for a sharp economic rebound.
The Institute for Supply Management’s (ISM) non-manufacturing purchasing managers’ index (PMI) jumped to 57.1 in June from 45.4 in May.
"With broad-based reopening and a very low bar set by the readings of the past two months, we saw a very solid rebound this month to 57.1, the strongest reading since February 2020 (57.3)," Jefferies (NYSE:JEF) said.
Energy's move higher was cut short as oil prices pared gains to settle in the red, down 7 cents barrel, as some warn about the long-term Covid impact on crude demand.
"We believe that oil-market participants are focusing on the current demand trends but are still ignoring the long-term implications of the corona pandemic," Commerzbank said.
Amazon (NASDAQ:AMZN), meanwhile, boosted consumer discretionary stocks, rising 5.8% to top $3,000 for the first time ahead of the quarterly earnings season, which starts in earnest next week.
"(W)hen the next earnings season starts, this (Amazon) is a stock where these analysts, which primarily are all bullish, are going to have to be raising their price objectives," Piper Sandler (NYSE:PIPR) analyst Craig Johnson said.
On the M&A front, Uber Technologies (NYSE:UBER) tabled a $2.65 billion shares-only offer to acquire Postmates, the fourth largest food delivery services company, to beef up its UberEATS business.
Elsewhere, Tesla (NASDAQ:TSLA) surged to another all-time high, up 13.5%, just a week after its second-quarter deliveries topped estimates.