Stocks extend gains on Wall Street for third straight day
Stocks closed broadly higher on Wall Street Tuesday, extending the market’s winning streak to a third day.
The latest gains, which followed a rally in global stocks, were driven by optimism that the global economy will begin to recover as governments gradually allow businesses that were closed due to the coronavirus outbreak to reopen.
The Standard & Poor’s 500 index closed 0.8% higher after spending much of the morning wavering. Technology, industrial and healthcare sector stocks accounted for a big slice of the gains. Energy stocks far outpaced the rest of the market as the price of crude oil rose again. Bond yields rose, another sign of ebbing pessimism among investors.
So far, Wall Street’s momentum has not been derailed by the wave of daily unrest across the U.S. that began last week in Minneapolis as a protest over police brutality. Cities across the country have seen largely peaceful protests but also instances of violence and destruction, drawing threats from the White House to send troops in to put down the unrest.
The S&P 500 gained 25.09 points to 3,080.82. The Dow Jones industrial average rose 267.63 points, or 1.1%, to 25,742.65. The Nasdaq composite, which is heavily weighted with technology companies, added 56.33 points, or 0.6%, to 9,608.37. That index had been down 0.8% in the early going.
Smaller-company stocks had some of the biggest gains. The Russell 2000 index picked up 12.84 points, or 0.9%, to 1,418.21.
Stocks have now recouped most of their losses after the initial economic fallout from the coronavirus knocked the market into a 34% skid in February and March. The S&P 500 is now down 9% from its all-time high in February.
Investors are hoping that the worst of the recession has already passed, or will soon, as governments around the country and around the world slowly lift the restrictions that left broad swaths of the U.S. economy at a standstill beginning in March.
In Europe, France’s CAC 40 jumped 2% on Tuesday as the country opened restaurants, cafes, parks and beaches and launched a contract tracing app to help keep tabs on new contagions. Germany’s DAX, which had been closed Monday, caught up with previous global markets’ gains and surged 3.7%. Britain’s FTSE 100 added 0.9%. Markets in Asia closed broadly higher.
While more countries and sectors are reopening, economic activity is expected to remain subdued as social distancing rules complicate plans to get back to business. For now, Wall Street is betting that the U.S. government and others will not move to close the economy again even if there is a pickup in new cases.
Bond yields were mostly higher. The yield on the 10-year Treasury rose to 0.68% from 0.66% late Monday.
Oil prices rose. Benchmark U.S. crude oil for July delivery rose $1.37 to settle at $36.81 a barrel Tuesday. Brent crude oil for August delivery rose $1.25 to $39.57 a barrel.
The balance of this week will provide new data on the labor market, which has racked up huge increases in Americans who’ve lost their jobs as the coronavirus shutdowns have left millions out of work.
Payroll processor ADP issues its May survey of hiring by private U.S. companies Wednesday. The next day, the government releases its weekly tally of applications for unemployment aid. And on Friday, the government reports its May labor market data. Analysts surveyed by FactSet expect the report will show that the economy lost 9 million jobs last month and that the national unemployment rate jumped to nearly 20%.
Investors will also have their eye on a couple of companies set to go public this week. Music company Warner Music Group is set to hold its IPO on Wednesday, while business information services company ZoomInfo Technologies is scheduled to go public Thursday.