Monday doesn’t get markets down
Wall Street rallies on ‘raw optimism’ despite scant virus data
NEWYORK— Investors grabbed hold of a few glimmers of hope Monday that the coronavirus pandemic could be slowing and sent stocks surging in a worldwide rally, capped by a 7 percent leap for the U.S. market.
The number of new coronavirus cases is dropping in the European hot spots of Italy and Spain. The center of the U.S. outbreak, New York, also reported that its number of daily deaths has been effectively flat for two days. Even though the U.S. is still bracing for a surge of deaths because of COVID-19 and New York’s governor said restrictions should stay in place to slow its spread, the encouraging signs were enough to launch the S&P 500 to its best day in nearly two weeks.
“We’re running on raw optimism. Maybe that’s the best way to put it,” said Randy Frederick, vice president of trading and derivatives at the Schwab Center for Financial Research.
The S&P 500’s gains accelerated throughout the day, and markets in Europe and Asia rose nearly as much. In another sign that investors are feeling a bit less pessimistic about the economy’s path, they sold bonds. The yield on the 10-year Treasury rose for the first time in four days.
Investors have been waiting anxiously for signs that the rate of new infections may hit its peak, which would give some clarity about how long the upcoming recession will last and how deep it will be. Without that, markets have been guessing about how long businesses will remain shut down, companies will lay off workers and flights will remain canceled
because of measures meant to slow the speed of the outbreak.
“The virus is not everything. It’s the only thing, and nothing else really matters” to the markets, Frederick said, particularly in a week that is relatively light on economic
reports.
The S&P 500 climbed 175.03, or 7 percent, to 2,663.68, and nearly all the stocks in the index were higher. It more than recovered all its losses from the prior week, when the government reported a record number of layoffs sweeping the economy.
The Dow Jones Industrial Average shot up 1,627.46 points, or 7.7 percent, to 22,679.99, and the
Nasdaq rose 540.15, or 7.3 percent, to 7,913.24.
The latest gains are not likely to have much staying power, given how much uncertainty remains about when the pandemic will subside significantly and how much harm will have been inflicted to the economy, said Nela Richardson, investment strategist at Edward Jones.