S&P 500 wipes out 2020 losses with major rally

Energy shares drove jump, which hit 15-week high

The torrid rally in U.S. stocks pushed the S&P 500 into the green for the year as easing lockdowns bolstered economic optimism.

A jump to a 15-week high on Monday extended the benchmark’s surge from its March low to almost 45 per cent. Energy shares drove the advance as Occidental Petroleum Corp. soared after Bloomberg News reported the company is reviewing options for its Middle Eastern assets. The Nasdaq 100 rose to a record high and Boeing Co. led gains in the Dow Jones Industrial Average.

The dollar posted its longest slide in almost a decade, while Treasuries increased. Oil sank as Saudi Arabia said it wouldn’t continue its additional, deeper output curbs after June.

U.S. equities extended gains as many parts of the country came out of the shutdowns that brought the world’s largest economy to a standstill amid the coronavirus pandemic. To Citigroup’s strategists including Tobias Levkovich, positioning may be overly extended and investors may not be factoring all the potential risks. Meanwhile,

Stan Druckenmiller — who last month warned about owning stocks — said on Monday that he now believes he was “far too cautious” during the current market rally.

“As long as the data is improving and the market has the tailwind of liquidity at its back, it’s probably going to continue to rise,” said Ed Campbell, portfolio manager and managing director at QMA.

“I wouldn’t be betting against equities at this point.”

The dollar fell for an eighth straight day, down to the level before the coronavirus crisis sparked a rush to haven assets. Where it goes from here mostly depends on the Federal Reserve, which will probably welcome all signs of recovery in its statement at the conclusion of this week’s meeting. But policymakers may be wary of an unruly increase in borrowing costs.