• Nevada, Alabama, Florida, California and Arizona reported spike in virus cases
  • Covid-19 cases have also surged in Brazil, South Korea and Germany
  • Sales of existing homes dropped 9.7% in May to 3.91 million units

U.S. stocks rose on Monday supported by gains in some tech names, despite reports that some states and foreign countries recorded a surge of new coronavirus cases.

The Dow Jones Industrial Average gained 153.50 points to 26,024.96, while the S&P 500 rose 20.12 points to 3,117.86 and the Nasdaq Composite Index climbed 110.35 points to 10,056.47.

Monday’s volume on the New York Stock Exchange totaled 3.79 billion shares with 1,556 issues advancing, 64 setting new highs, and 1,421 declining, with six stocks setting new lows .

Active movers were led by Ideanomics Inc. (IDEX), American Airlines (AAL) and NIO Inc. (NIO)

Newly confirmed cases of coronavirus have recently spiked in Nevada, Alabama, Florida, California and Arizona.

“Investors are using the market as a proxy for getting back to normal,” said Kim Forrest, founder of Bokeh Capital. “If too many people get sick [from the virus], they’re going to shut down parts of the economy and the market will react. I’m just looking for that first state shutdown or area shutdown in the U.S. That’s going to remind investors of what happened this spring.”

“The areas of concern that weighed on stocks Friday afternoon were reinforced over the weekend,” wrote Adam Crisafulli of Vital Knowledge. “Governments look set to proceed with reopening, but the real driver of growth will be behavioral normalization and that is very likely to be impended by the steady negative coronavirus news flow.”

Covid-19 cases have also surged in Brazil, South Korea and Germany.

“There’s a war going on between the bulls and bears, with each seizing every little data point to buttress their opposing arguments,” said Vito Racanelli, market intelligence analyst at Fundstrat Global Advisors. “I do think that perhaps the market has gone past its recovery ‘straight-up’ phase, as investors realized coronavirus was not a world ender. But the data remains mixed and Covid-19 fear remains strong, and it’s understandable.”

However, in the U.K., Prime Minister Boris Johnson will soon ease social distancing rules to boost the hospitality industry.

“The market doesn’t believe that we will see such draconian lockdowns even if there is a resurgence of the virus. The politics have moved on,” said James Athey, a money manager at Aberdeen Standard Investments. “Rightly or wrongly, there’s also a pretty widespread feeling that riskier assets won’t go down too far because the Federal Reserve won’t let them.”

“Could a rise in new infections force advanced economies to re-impose lockdowns that are so harsh and widespread that they would shatter confidence and disrupt the nascent economic rebound? Four months after the virus started to hit Europe badly, that remains the key risk to watch for the economic outlook as well as for financial markets,” said Holger Schmieding, chief economist at Berenberg Bank of Hamburg.

The Federal Reserve Bank of Chicago's National Activity Index jumped to 2.61 in May from minus-17.89 in April.

Sales of existing homes dropped 9.7% in May to a seasonally adjusted annualized rate of 3.91 million units, said the National Association of Realtors. Sales plunged 26.6% on an annual basis.

But realtors contend this marked a bottom.

“Well into the month of June, I think people are much more relaxed, knowing that there is a massive stimulus package in the economy,” said Lawrence Yun, chief economist for the Realtors. “I am very confident that this will be the cyclical low point. Buyers are coming back and listings are coming back.”

Overnight in Asia, markets finished lower. The Shanghai Composite edged down 0.08%; Hong Kong’s Hang Seng fell 0.54%; while Japan’s Nikkei-225 slipped 0.18%.

In Europe markets finished lower, as Britain’s FTSE-100 fell 0.76%, while France’s CAC-40 dropped 0.62% and Germany’s DAX slipped 0.55%.

Crude oil futures rose 2.14% at $40.60 per barrel, Brent crude was flat at $43.08. Gold futures rose 0.78%.

The euro rose 0.67% at $1.1255 while the pound sterling gained 0.93% at $1.2463.

The yield on the 10-year Treasury rose 1% to 0.704% while yield on the 30-year Treasury slipped 0.61% to 1.461%.