Dow Jones jumps 579 points as Boeing boosts market

NEW YORK -- Stocks surged on Wall Street Monday, as the market clawed back from last week's losses. Investors celebrated a strong housing report and positive news from Boeing.

The Dow Jones Industrial Average rose over 579 points or 2.3 percent, while the S&P 500 tacked on 1.47 percent.

Boeing gave the broader market a boost rising over 14 percent after a successful test flight of 737 Max jet which is expected to be followed by future tests.

The Nasdaq rose 1.2 percent helped by Apple. Tesla also rallied after CEO Elon Musk said the electric automaker could break-even in the second quarter despite the global pandemic.

On the economic front, the number of Americans signing contracts to buy homes rose a record 44.3 percent in May from a month earlier. That was more than double the 17 percent rise that economists were expecting. It was also a whiplash reversal from the record-breaking plunge of nearly 22 percent that came in April as the pandemic froze the housing market.

The encouraging housing report is likely a sign of pent up demand, considering that spring is the key season for home sales and it was delayed mostly until summer, said Mark Litzerman, head of global portfolio management at Wells Fargo Investment Institute.

“It is good to see that people are out there buying again,” he said. “The biggest thing is how quickly the consumer comes back and how do they come back.”

Investors shrugged off a rise in infections of the new coronavirus, including in the U.S. South and West, has dented the optimism that earlier sent the S&P 500 screaming nearly all the way back to the record it reached in February.

The worry is that the worsening levels could choke off the budding improvements the economy has shown recently as states and other governments ease up on lockdown orders, even with the Federal Reserve and other central banks pumping unprecedented amounts of aid into the economy.

Florida and Texas put new restrictions on bars to slow the spread of the virus, for example, which helped drive the S&P 500 to a loss of 2.9% last week. Other governments around the world are likewise backtracking on efforts to reopen their economies following widespread lockdowns that sent the global economy into a sudden, severe recession.