Stock markets boom around the world
NEW YORK — Stocks rallied worldwide Monday as investors bet that the economy can continue its dramatic turnaround despite all the challenges ahead.
The S&P 500 rose 1.6 percent, following up on similar gains in Europe and Asia, and clawed back to within 6.1 percent of its record set in February. The headliner was China’s stock market, which leaped 5.7 percent for its biggest gain since 2015, when it was in the midst of a bubble bursting. Treasury yields also ticked higher in a signal of growing optiweek’s after reports showed improvements in the U.S. and European economies.
Stocks of the biggest companies once again led the way, and strength for Apple, Amazon and other tech-oriented titans helped lift the Nasdaq composite 226.02 points, or 2.2 percent, to close at a record high of 10,433.65.
The Dow Jones Industrial Average rose 459.67 points, or 1.8 percent, to 26,287.03. The S&P 500 rose 49.71 points to 3,179.72 for its third gain of at least 1.5 percent in the last five days.
They’re the latest buoyant moves for markets, where investors are focusing more on recent improvements in the economy and all the stimulus that central banks and governments are supplying than on how much pain still remains. Investors are also continuing to sidestep the mounting number of known coronavirus infections, at least for now.
“The economic damage isn’t going to be as dire and severe as was initially predicted,” said Peter Essele, head of portfolio management for Commonwealth Financial Network. “That helps explain the rebound.”
The worry is that if the pandemic keeps worsening, with hotmism spots stretching across the U.S. South and West, it could scare shoppers and businesses away from spending.
The huge spending efforts to resuscitate the economy could also lead to a reckoning in the future. “We have now mortgaged our entire future to try and withstand this downturn,” Essele said.
At some point, the buildup in debt for the U.S. government could lead to higher taxes and interest rates. But markets see that as a potential problem for another day.
For now, the trend is still upward. Monday’s rally follows last 4 percent gain for the S&P 500, which itself helped cap the best quarter for the U.S. stock market since 1998. It’s a turnaround from the market’s earlier sell-off, which sent the S&P 500 down nearly 34 percent from its record.
A report released Monday morning showed that U.S. services industries snapped back to growth in June. The results were much stronger than expected.
Benchmark U.S. crude oil for August delivery fell 2 cents to settle at $40.63 a barrel. Brent crude oil for September delivery rose 30 cents to $43.10 a barrel.