S&P 500 back within 8% of high

Stocks bubbled even higher on Wednesday, vaulting Wall Street back to where it was just one week after it set its alltime high earlier this year, as optimism builds that the economy can climb out of its current hole relatively quickly.

The S&P 500 rose 1.4% for its fourth straight gain as lockdowns loosen around the world and raise hopes for a coming economic recovery. Treasury yields also strengthened in a sign of improved confidence after reports suggested that while the U.S. economy is still getting pummeled, it may not be as bad as economists had feared.

“It's fairly clear to us that the economy clearly bottomed in late April and early May,” said James Ragan, director of wealth management research at D.A. Davidson. “At some point the concern will be on the pace of the recovery and not just the recovery itself.”

The S&P 500 rose 42.05 points to 3,122.87, the latest upward move in its nearly 40% surge since late March. The index is back above where it was on Feb. 26, one week after setting its record.

The Dow Jones Industrial Average gained 527.24 points, or 2%, to 26,269.89, and the Nasdaq composite rose 74.54, or 0.8%, to 9.682.91.

A survey from payroll processor ADP said that private employers cut nearly 2.8 million jobs last month, but that was much milder than the 9.3 million that economists told investors to expect. That raises optimism that Friday's more comprehensive jobs report from the U.S. government may also not be as bad as feared. Economists say it may show a loss of 8 million jobs, which would be a deceleration from April's loss of 20.5 million jobs.

Other reports showed an economy that remains in bad shape, but not quite as terrible as economists had forecast. One report said the nation's services industries contracted by less than economists expected, and at a more modest rate than in April. Another report said factory orders dropped 13% in April, but not by as much as the 14.8% that economists had forecast.

Companies that would most benefit from a growing economy led the market Wednesday, continuing a recent trend as hopes rise that the economy and life in general can return closer to normal as business- shutdown orders lift.

Financial stocks in the S& P 500 jumped 3.8% for one of the largest gains among the 11 sectors that makeup the index. JPMorgan Chase rose 5.4%, and Wells Fargo added 5.2%. They recovered more of the losses sustained earlier this year on worries that the recession would mean waves of loan defaults them.

Smaller stocks were also among the market's biggest winners, as they often are when expectations are rising for the economy's strength. The Russell 2000 index of small-cap stocks rose 2.4%.

Stocks that had been stalwarts earlier when investors were building portfolios that could wini na stayat-home economy, meanwhile, were lagging. Netflix fell 1.2%.