S&P 500 climbs back to within 7.8% of its high as Wall Street’s rally rolls on
Stocks bubbled even higher on Wednesday, vaulting Wall Street back to where it was just one week after it set its all-time 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.
Financial stocks in the S&P 500 jumped 3.8% for one of the largest gains among the 11 sectors that make up 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 for 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 win in a stay-at-home economy, meanwhile, were lagging. Netflix fell 1.2%.
The four straight gains for the overall S&P 500 mark its longest winning streak since early February, before the market sold off by nearly 34% on worries that the coronavirus outbreak will send the economy into its sharpest recession in decades.
Stocks have been climbing since late March, at first on relief after the Federal Reserve and Congress promised massive amounts of aid for the economy. More recently, the driving force has been optimism that growth can resume as states across the country and nations around the world lift restrictions on businesses intended to slow the spread of the outbreak.
The S&P 500 has climbed back within 7.8% of its record.
A currency trader watched monitors Wednesday in the foreign exchange dealing room at KEB Hana Bank’s headquarters in Seoul, South Korea. Stocks have been climbing as nations ease restrictions designed to contain the coronavirus pandemic.