COVID-19 treatment hope sparks US stocks rally

NEW YORK: US stocks opened the week like they closed last week: on a high note, amid news the US Food and Drug Administration (FDA) had authorized the use of a COVID-19 treatment.

About 30 minutes into the Monday trading session, the benchmark Dow Jones Industrial Average climbed 0.5 percent to 28,081.45.

The broad-based S&P 500 jumped 0.7 percent to 3,419.92, and the tech-rich Nasdaq Composite Index increased 0.8 percent to 11,400.51, remaining buoyant after more than 30 record closes in 2020.

The quiet days of late August often produce big swings in share prices, but Wall Street got a boost after the FDA on Sunday issued an "emergency use authorization" allowing doctors to administer plasma from people who have recovered from COVID-19 to treat new patients.

"Based on scientific evidence available, the FDA concluded this product may be effective in treating COVID-19 and that the known and potential benefits of the product outweigh the known and potential risks of the product in hospitalized COVID-19 patients," the agency said in a statement.

That authorization was issued after President Donald Trump accused the FDA, without offering any evidence, of delaying a vaccine and treatments to undermine his bid for re-election in November.

"The news on the COVID-19 treatment front is countering the continued stalemate among US lawmakers on a highly-expected new round of fiscal relief measures for the unemployed and small businesses as key emergency benefits expired at the end of July and could threaten consumption," analysts at Charles Schwab investment bank said.

Looking ahead, investors will be watching for new data on the hot US housing market, a revised estimate of GDP in the second quarter, which contracted 33 percent, as well as the latest tally of unemployment insurance applications.

And markets will pay close attention to Federal Reserve Chair Jerome Powell's speech Thursday at an annual gathering of world central bankers where he is expected to preview a change in strategy for US monetary policy.

Apple continued its upward march, gaining 1.2 percent to $503.51.