Wall Street keeps rallying; S&P 500 back within 2% of record

NEW YORK — Wall Street’s big rally keeps rolling, and the S&P 500 rose for a fourth straight day Wednesday to sit just 1.7% below its record.

The S&P 500 climbed 21.26 points, or 0.6%, to 3,327.77, echoing gains for stocks across Europe and Asia. If the U.S. market has just a few more days like that, it will erase the last of the historic losses it’s taken since February because of the coronavirus pandemic and the recession it caused.

The Dow Jones Industrial Average rose 373.05, or 1.4%, to 27,201.52, and the Nasdaq composite added 57.23, or 0.5%, to set another record at 10,998.40.

Much of Wall Street’s focus this week has been on Washington, where Congress and White House officials are negotiating on more aid for an economy that’s shown some improvement but is still hobbling. Investors say such a package is crucial and needs to arrive quickly, with millions of Americans still out of work and $600 in weekly unemployment benefits from the U.S. government having recently expired.

Treasury Secretary Steven

Mnuchin said late Tuesday that the two sides set a goal of reaching an agreement by the end of the week to permit a vote next week, though negotiators said the two sides remain far apart on key issues.

The pressure on Washington to act quickly is mounting. A report on Wednesday suggested that hiring was far weaker last month than economists expected. Private employers added just 167,000 jobs, according to a survey by payroll processor ADP, well below the 1.2 million that economists had forecast.

It highlights the damage that a resurgence in coronavirus cases across much of the country is doing to the economy. It also puts an even brighter spotlight on Friday’s more comprehensive jobs report coming from the Labor Department.

Investors across the stock market seem to be assuming that Congress will reach a deal sooner rather than later, as well as that the economy will continue to improve despite the pandemic, said Willie Delwiche, investment strategist at Baird.

Prudential Financial rose 6.2%, helping to drive the financial sector to one of the market’s bigger gains, after it likewise reported results that weren’t as bad as analysts had forecast.

That’s been the trend across much of the market this reporting season. Stocks have continued to climb even though S&P 500 companies appear to be on track to report a roughly 34% drop in earnings per share from a year earlier, according to FactSet. That’s in part because investors had prepared for an even steeper drop.

A better-than-expected reading on the nation’s services sector also added to the mixed picture on the economy. The services sector includes retail, health care and transportation, and it makes up the bulk of the U.S. economy. It grew in July for the second straight month, according to a survey by the Institute for Supply Management, and accelerated when economists were expecting a slight slowdown.

Even within that report, though, were seeds of concern. Growth in new orders helped to drive the reading higher, but employment trends in the report weren’t as encouraging.

Benchmark U.S. crude rose 49 cents to settle at $42.19 per barrel. Brent crude, the international standard, added 74 cents to $45.17 a barrel.