S&P 500 hits another record, closes above 3,400 for the first time as Apple and airlines rise

Stocks rose to an all-time high on Monday, lifted by gains in tech and some reopening names, as sentiment around the coronavirus pandemic improved.

The Dow Jones Industrial Average jumped 378.13 points, or 1.4%, to close at 28,308.46. The S&P 500 climbed 1% to 3,431.28 and hit an all-time high. Monday also marked the S&P 500’s first-ever close above 3,400. The Nasdaq Composite advanced 0.6% to 11,379.72 and also reached a record. 

Apple shares rose 1.2% to lead other tech-related names higher. Facebook climbed 1.6% and Amazon advanced 0.7%. Alphabet rose 0.6%.

Shares of airlines and cruise operators gained amid positive coronavirus treatment developments. United Airlines rose by more than 9% along with American. Delta gained 9.3%. Carnival advanced 10.2%. Norwegian Cruise Line and Royal Caribbean closed higher by 7.6% and 4.7%, respectively. 

Monday’s moves came as the number of new coronavirus cases continues to decline in the U.S. Since spiking to more than 64,000 cases earlier this month, the number of new daily infections in the U.S. has not topped 49,000, according to Johns Hopkins University. On Sunday, there were less than 37,000 new confirmed cases, the data showed. 

“I think something interesting may evolve in the weeks and months ahead,” said Tom Lee, head of research at Fundstrat Global Advisors, in a note. “I think it is entirely possible that USA COVID-19 cases crash to sub-10,000 in September.”

“The US is soon becoming one of the safest places in the World. And if this is true, capital will also want to seek the US,” which means “stocks rise further,” Lee said. 

On Sunday, the U.S. Food and Drug Administration issued an emergency use authorization of convalescent plasma for hospitalized Covid-19 patients, a treatment that uses blood plasma donated by people who’ve recovered from the virus.

President Donald Trump said at a news conference Sunday that the plasma treatment cuts the mortality rate by 35%.

However, results of the study by the Mayo Clinic that the FDA cited in its authorization of the treatment indicates that patients below age 80 who were not on a respirator and received plasma with a high level of antibodies within three days of diagnosis were about 35% more likely to survive another 30 days compared with patients who received plasma with a low level of antibodies. The study acknowledged, however, that its findings are limited, particularly because it did not have a placebo comparison.

The Trump administration is also considering fast-tracking an experimental coronavirus vaccine developed in the U.K. for use in the United States ahead of the nation’s upcoming presidential election, according to a Financial Times report.

Wall Street was coming off a banner week as a seemingly unstoppable rally in major technology shares pushed the S&P 500 to levels above its previous record set before the pandemic. The broad equity benchmark posted its fourth straight positive week and closed at a fresh record on Friday. 

Those tech gains were largely driven by Apple ahead of its 4-for-1 stock split. Apple’s massive gains this year — along with those of Facebook, Amazon, Netflix, Alphabet and Microsoft — have raised concerns about how sustainable this market rally is.

Bruce Bittles, chief investment strategist at Baird, thinks investors need to be careful as only a small group of stocks is contributing to the market’s rally.

“The S&P 500 and the NASDAQ hit new record highs last week but more stocks were down than up. Typically, the opposite should be true,” Bittles wrote in a note. “In a healthy rising market, the majority of stocks, groups and sectors should be rising along with the averages. On Friday, deteriorating market breadth was exhibited by roughly 200 stocks in the S&P 500 that were up and almost 300 were down.”

But value investor Joel Greenblatt thinks the market “froth” isn’t coming from Big Tech.

“I think some of the stocks that people worry about — whether it’s Apple, Microsoft, Google, Facebook, Amazon, all those leading companies — they really just sell at a slight premium to the market,” Greenblatt, co-chief investment officer at Gotham Funds, told CNBC’s “Squawk Box” on Monday.

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