Stocks up as outlook is stronger than worry

Indexes haven’t been this highs since before widespread shutdowns.

Stocks closed higher on Wall Street Tuesday, driving the S&P 500 and Dow Jones Industrial Average to their highest levels in nearly three months as optimism over the reopening of the economy overshadowed lingering worries about the coronavirus pandemic.

The S&P 500 rose 1.2%, for a time climbing above the 3,000point mark for the first time since March 5, until a burst of selling in the final minutes of trading trimmed the market’s gains. The Dow spent much of the day above the 25,000-point threshold for the first time since March 10, but the late pullback knocked it slightly lower. The indexes haven’t been at these levels since before widespread business shutdowns aimed at slowing the spread of the outbreak sent the U.S. economy into a sharp skid.

The post-Memorial Day rally followed a strong rise in global markets as more nations push to open their economies. Financial and industrial stocks accounted for much of the market’s gains. Companies that rely on consumer spending also rose broadly. Airlines were big winners as traders welcomed data showing a pickup in air travel during the long holiday weekend.

Fresh optimism about the development of potential vaccines for COVID-19 have also helped lift stocks. Investors are keenly focused on the process of reopening the U.S. economy, which is likely to accelerate over the summer.

Airline stocks soared on indications that air travel is recovering from mid-April lows, although it remains down sharply from pre-pandemic levels.