Coronavirus | S&P 500 rises on fears of a higher tax rate


Sanofi buys translator bio for $3.2 Billion in $3.2 - bln transaction.

Aug 3 - The S&P 500 gained on Tuesday on gains in Apple and healthcare stocks, although concerns around a surge in the Delta variant of coronavirus took some shine off an upbeat corporate earnings season.

Ten of the 11 S&P indexes were trading higher, with energy stocks rebounding after being hit by a dip in oil prices.

Apple Inc. rose 1.3%, although other tech-heavy stocks including Netflix Inc, Tesla Inc and Facebook Inc edged lower, capping gains on the tech-heavy Nasdaq.

A clutch of U.S. companies including industrial materials maker Dupont and Discovery Inc reported better than expected quarterly results, but their shares fell as investors booked profits amid lofty stocks valuations.

Stocks have taken a substantial increase in earnings, which is mostly due to an easy comparison from last year, said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey.

What is troubling investors as COVID 19 infection continues to invade the economy and the possibility of a higher tax rate.

Rising cases of the Delta variant and signs that the domestic economic rebound had begun to slow have knocked three main U.S. stock indexes off record highs, while a deepening regulatory scrutiny in China has sent jitters through the global technology sector.

Shares in UK-listed gaming companies fell between 2.8% to 4.6% after a sharp selloff in Tencent's social media and video games group Tungchang, driven by fears the sector could be next in regulators' crosshairs.

'Grand Theft Auto' maker Take-Two Interactive Software Inc plunged 9.2% even after it issued a disappointed sales forecast.

ET, the Dow Jones Industrial Average and the S&P 500 each gained 0.47% while Nasdaq Composite increased 0.25%.

Data on Monday showed factory orders rose 1.5% in June after a 2.3% increase in the previous month. Economists polled by Reuters had anticipated a rise of 1% in June.

Later in the week, focus will shift to data on the U.S. services sector and the monthly jobs report for July.

In case the data continues to come in weaker than expected, the equity market will take it negatively, says Mark Grant, chief global strategist of B. Riley Financial.

I'm not expecting anything dramatic, but I’m expecting a continued updraft of equity and lower yield on Treasuries.

In M&A - driven moves, Translate Bio skyrocketed 29.1% after the France's Sanofi agreed to buy the U.S. biotech company in a $3.2 billion deal.

Under Armour Inc and Ralph Lauren Corp have jumped 6.4% and 9.1%, respectively, after raising their annual revenue forecast.

Overall, earnings at S&P 500 firms are estimated to have climbed over 90% in the second quarter versus forecasts of 65.4% at the beginning of July, according to IBES data from Refinitiv.

Advancer issues outnumbered decliners 1.10 - to 1 on the Nasdaq and 1.35 - to -1 on the NYSE.

The S&P index recorded 52 new 52-week highs and three new lows, while the Nasdaq index recorded 74 new highs and 85 new lows.