Stocks vault higher, Nasdaq hits record
Wall Street’s enthusiasm about the reopening economy sent stocks scrambling even higher on Monday, and the Nasdaq composite wiped away the last of its coronavirusinduced losses to set a record.
The S&P 500, which dictates how more 401(k) accounts perform, climbed back within 4.5% of its own record as optimism strengthens that the worst of the recession may have already passed. Stocks that would benefit most from an economy that’s growing again rose the most, including smaller companies, airlines and oil producers.
As more retailers and restaurants reopen, mall and shopping center operators continued to surge Monday on the hopes that rent collections will improve this month.
Chattanooga-based CBL Properties, which announced
Friday that there’s “substantial doubt” it will continue to operate as a going concern within about a year, continued to gain in market value with shares of CBL rising another 19% in Nasdaq trading Monday following the 31.2% increase in CBL’s stock prices last Friday. Since its May 15 low of just 20 cents a share, CBL shares have more than doubled in value even as the company reports that it is collecting only 25-30% of its rental payments in the past two months.
Buoyed by prospects of less severe recession than first feared, the S&P 500 rallied 38.46 points, or 1.2%, to 3,232.39 and is at its highest level since February, which a panel of economists said on Monday is the month when the recession officially began. That’s when employment set a peak before tumbling after businesses shut down across the country to slow the outbreak.
The Dow Jones Industrial
Average rose 461.46, or 1.7%, to 27,572.44. The Nasdaq composite, which is more heavily weighted to the big technology stocks that held up the best earlier this year, gained 110.66, or 1.1%, to 9,924.74.
Stocks have been rising since late March, at first on relief after the Federal Reserve and Capitol Hill pledged to support the economy and more recently on hopes that the recovery may happen more quickly than forecast.
Those hopes got a huge boost Friday when the U.S. government said that employers added 2.5 million jobs to their payrolls last month. Economists were expecting to see 8 million more lost.
States across the country are slowly relaxing restrictions on businesses meant to slow the spread of the coronavirus outbreak, which is raising expectations that the economy can pull out of its coma. New York City, which has been the country’s hardest-hit, began allowing retailers and some other businesses to reopen on Monday with some restrictions.
That puts more scrutiny on economic reports this week as investors look for confirmation that Friday’s jobs report was a true inflection point and not just an aberration.
Even if the economy did hit its bottom a month or two ago, economists warn that many risks are still looming over a very long road back to full recovery.