Markets up as recovery hopes overshadow virus concerns

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 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.

“That was one of the concerns of the recovery, that people would be hesitant to resume their lives,” said Willie Delwiche, investment strategist at Baird. “This is a stock market that’s looking ahead to the economy improving and maybe moving beyond the lockdown mentality...Two weeks from now, if you have a spike in cases, then everyone will reconsider things.”

The S&P 500 rose 36.32 points, or 1.2%, to 2,991.77. The index was coming off a solid week and is on track for a second-straight month of gains. The Dow climbed 529.95 points, or 2.2%, to 24,995.11. The index had been up more than 700 points. The Nasdaq rose 15.63 points, or 0.2%, to 9,340.22.

Fears of a crushing recession due to the coronavirus sent the S&P 500 into a skid of more than 30% in March. Hopes for a relatively quick rebound and unprecedented moves by the Federal Reserve and Congress to stem the economic pain drove a historic rebound for stocks in April and have bolstered optimism that the market won’t return to the depths seen two months ago.