Trader Aman Patel
Dow, S&P 500 hit 3-month highs amid traders’ optimism
works Tuesday on the partially reopened trading floor of the New York Stock Exchange. Stocks surged Tuesday, driving the S&P 500 to its highest level in nearly three months.
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 3,000-point 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 S&P 500 rose 36.32 points to 2,991.77. The index was coming off a solid week and is on track for a secondstraight month of gains. It remains down 11.7% from its all-time high in February.
The Dow climbed 529.95 points, or 2.17%, to 24,995.11.
The index had been up more than 700 points. The Nasdaq rose 15.63 points, or 0.17%, to 9,340.22. The Russell 2000 index of small companies gained 37.54 points, or 2.8%, to 1,393.07.
The post-Memorial Day rally followed a strong rise in global markets as more nations push to open their economies. Financial and in
dustrial 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.”
Fears of a crushing recession due to the coronavirus sent the S&P 500 into a skid of more than 30% in March.
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.
A couple of economic reports gave traders more reason for encouragement Tuesday.
The Commerce Department said sales of new U.S. homes inched up 0.6% last month, a surprising gain that hints at the relative health of many consumers. Over the past 12 months, sales are down 6.2%. Meanwhile, the Conference Board said its index of consumer confidence ticked up in May to 86.6 from a reading of 85.7 in April. The index is still down sharply from February’s reading, when it climbed to 130.7.
Optimism over the prospect that consumers will be eager and able to spend money as more businesses open helped push travel-related stocks sharply higher Tuesday. Norwegian Cruise Line climbed 15.3%, Royal Caribbean jumped 14.9% and Carnival rose 12.6%.
Airline stocks soared on indications that air travel is recovering from mid-April lows, although it remains down sharply from pre-pandemic levels.
In another confidenceboosting development on Wall Street, the New York Stock Exchange reopened its trading floor Tuesday for the first time since mid-March, when it closed due to the coronavirus outbreak.
New York Gov. Andrew Cuomo rang the opening bell at the exchange, which allowed a limited number of traders back to the floor. It required traders to adhere to social distancing guidelines and wear masks.