Wall Street set to open higher on hopes of China-led rebound

By Medha Singh

(Reuters) – Wall Street’s main indexes were set to open higher on Monday, with the Nasdaq eyeing another record level, as bets on China leading the revival from a coronavirus-driven downturn helped investors look past a surge in new cases of COVID-19 at home.

China stocks jumped more than 5%, boosted by ample liquidity, cheap funding and expectations of a faster and a better bounce-back in business activity than other major countries still battling the coronavirus crisis. [.SS]

A slew of upbeat U.S. data, including a record rise in June payrolls, helped the Nasdaq close at an all-time high on Thursday and brought the S&P 500 and the Dow nearly 8% and 13% below their respective peaks from February.

“Investors are more focused on what the other side of this pandemic looks like, as opposed to the short-term risks of shutdowns,” said Matt Lindholm, managing director – investment strategies at CAZ Investments in Houston.

A sharp surge in COVID-19 cases recently in the United States has cast a shadow over the strong rally in stocks as many states have curtailed their reopening plans, threatening to derail the economic recovery.

During the Independence Day weekend, several states reported a record increase in new infections, with Florida surpassing the highest daily tally reported by any European country during the peak of the outbreak.

Data at 10 a.m. ET (1400 GMT) is likely to show ISM’s non-manufacturing activity index rose to a reading of 50.1 in June from 45.4 in May.

At 8:01 a.m. ET, Dow e-minis were up 375 points, or 1.46%. S&P 500 e-minis were up 37.75 points, or 1.21% and Nasdaq 100 e-minis were up 122 points, or 1.18%.

Among individual stocks, Tesla (NASDAQ:TSLA) Inc gained 5.8% in premarket trading, building on a four-day rally, after J.P. Morgan bumped up its price target for the electric carmaker’s stock following its better-than-expected quarterly deliveries.

Uber Technologies (NYSE:UBER) Inc climbed 6.7% as the ride-sharing company agreed on a deal to buy food-delivery app Postmates Inc in a $2.65-billion all-stock agreement.

Regeneron Pharmaceuticals Inc (NASDAQ:REGN) gained 3.1%, as the drugmaker said it had begun late-stage clinical trials to assess the effectiveness of its antibody cocktail in preventing and treating COVID-19.