Wall Street closes up on economic revival hopes

Stocks closed higher on Wall Street Wednesday, extending the market’s gains into a third day on hopes for a coming economic revival as larger swaths of the country relax stay-at-home mandates imposed due to the coronavirus pandemic and clear the way for more businesses to reopen.

Despite a choppy day of trading, the S&P 500 gained 1.5 percent and finished above the 3,000-point mark for the first time since early March. The Dow Jones Industrial Average crossed above 25,000 points, where it hasn’t closed since

March.

Financial, industrial and health care stocks accounted for a big slice of the gains. Department store chains, which took some of the market’s worst losses earlier this year when worries about the recession were peaking, surged amid optimism that life can inch back toward normal.

“Today is a little bit of a follow-through from yesterday,” said Bill Northey, senior investment director at U.S. Bank Wealth Management. “This is optimism about the reopening of the U.S. economy and, really, the global economy.”

The S&P 500 index rose 44.36 points to 3,036.13. The index had been down 0.7 percent before bouncing back toward the end of the day. The Dow gained 553.16 points, or 2.2 percent, to

25,548.27. The Nasdaq composite also recovered from an early slide, adding 72.14 points, or 0.8 percent, to 9,412.36. Small company stocks, which have lagged the broader market this year, were big gainers. The Russell

2000 index rose 43.28 points, or

3.1 percent, to 1,436.36.

The movements followed up on strong gains in Europe, where authorities proposed a 750 billion euro ($825 billion) recovery fund to help carry the region through the recession caused by the response to the coronavirus pandemic. Asian stocks were mixed, as tensions between the United States and China over the independence of Hong Kong weighed on markets there.

The S&P 500 is back to where it was in early March, in the early days of its sell-off on worries about the coming steep recession. It’s now down only 10.3 percent from its high in February, recovering from a nearly 34 percent drop in March.

Massive amounts of stimulus for the economy from the Federal Reserve and Capitol Hill helped start the rally in late March. The gains have accelerated more recently on hopes that economic growth can return later this year as governments ease up on business-shutdown orders meant to slow the spread of the coronavirus. In recent weeks, stocks whose profits are most closely tied to the strength of the economy have been showing more life.

Hopes for potential COVID-19 vaccines under development have also helped propel stocks.

“There’s still so much stimulus, and with consumers being in better shape, we will get through this sooner than most expect,” said Andrew Smith, chief investment strategist at Delos Capital Advisors.