Wall Street halts four-day losing streak
Stocks on Wall Street shrugged off an early slide and closed higher Tuesday, halting the first four-day losing streak since the market was selling off in the early days of the pandemic.
The S&P 500 climbed 1.1 percent, led by solid gains in technology and communications stocks, and companies that rely on consumer spending. Banks, health care and energy stocks closed lower. Homebuilders surged following a report showing U.S. home sales jumped in August to their highest level since 2006.
The gains helped the market recover some of its losses a day after stocks tumbled amid a raft of worries about the pandemic and governments’ response to it.
The S&P 500 rose 34.51 points to 3,315.57. The Dow Jones Industrial Average gained 140.48 points, or 0.5 percent, to 27,288.18. The Nasdaq composite climbed 184.84 points, or 1.7 percent, to 10,963.64. The Russell 2000 index of small company stocks picked up 11.71 points, or 0.8 percent, to 1,496.96.
Tuesday’s market rebound has been the exception this month. Wall Street has suddenly lost momentum in September following of powerful gains that returned the S&P 500 to a record. The benchmark S&P 500 index is down 5.3 percent so far this month, while the Nasdaq is off nearly 7 percent. A long list of concerns for investors has caused big swings in the market, from worries that stocks have grown too expensive to frustration about Congress’ refusal so far to deliver more aid to the struggling economy.
“Right now it’s kind of, reality is setting in, looking at valuations and realizing that coronavirus is still prevalent, we don’t have a vaccine and we don’t know who’s going to be in the White House in 2021,” said Lindsey Bell, chief investment strategist at Ally Invest.
Federal Reserve Chair Jerome Powell pressed Congress to act on additional aid for the economy during a House of Representatives committee hearing Tuesday, saying that the economy appears to be improving, but still likely needs more government stimulus. Extra weekly unemployment benefits and other stimulus that Congress approved in March have expired, and some areas of the economy have already slowed as a result.
That support from Congress, along with unprecedented moves by the Federal Reserve to aid marmonths kets, helped halt the S&P 500’s nearly 34 percent plummet earlier this year. Investors say it’s crucial that Congress extended more support, but partisan disagreements have blocked the efforts.
The sudden vacancy on the Supreme Court following the death of Justice Ruth Bader Ginsburg is amping up partisanship across the country, diminishing hopes even further.
Among other concerns for investors are rising tensions between the United States and China, which could lead to a Chinese retaliation against U.S. tech companies.