By Yasin Ebrahim
Investing.com – Wall Street climbed Monday, as big tech continued to rack up gains following bullish earnings last week, while healthcare names rallied on positive coronavirus treatment news.
The Dow Jones Industrial Average rose 0.83%, or 219 points. The S&P 500 gained 0.75%, while the Nasdaq Composite jumped 1.35%.
The "fab 5" megacap tech stocks - with the exception of Alphabet (NASDAQ:GOOGL) - continue to ride on the coattails of their recent wave of bullish earnings, with Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB) and Microsoft (NASDAQ:MSFT), which combined make up about 20% of the S&P 500 index, trading above the flatline.
Microsoft led the gains, up 4% after confirming that it was in talks to buy social media company TikTok from ByteDance.
The move has been cheered by analysts on Wall Street, who believe that the addition of TikTok could boost Microsoft's consumer offering.
"(Satya) Nadella has essentially had the golden touch since becoming CEO… although the missing piece in the puzzle has been a consumer trojan horse strategy which TikTok can fill along with a re-rating/sum-of-the-parts valuation," Wedbush analyst Daniel Ives said in a note.
Beyond tech, healthcare also supported investor sentiment on stocks thanks to signs of progress in the race for a coronavirus treatment.
Eli Lilly (NYSE:LLY) said it would get a phase 3 trial of its experimental coronavirus treatment, LY-CoV555, sending its shares more than 1% higher.
A lack of progress between U.S. lawmakers over the next coronavirus stimulus package, however, kept gains in the broader market in check.
Unemployment assistance, set at $600 a week in March, has since lapsed, and renewing it has remained a key sticking for lawmakers.
On the earnings front, Clorox (NYSE:CLX) slipped about 2% despite delivering quarterly results that beat on the top and bottom lines.
In economic news, signs of a turnaround in manufacturing continued.
ISM manufacturing data for July showed an uptick to 54.2, beating expectations of 53.6. A reading above 50 in the ISM index indicates an expansion in manufacturing, which accounts for about 12% of the U.S. economy.
"We remain confident that manufacturing will be more resilient to Covid-related developments than the service side of the economy, and activity should continue to expand in coming quarters as the recovery takes hold," Jefferies (NYSE:JEF) said in a note.