Stocks notch gains on recovery hopes
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U.S. stocks extended recent gains Tuesday, as investors weighed the prospects for an economic recovery as more businesses reopen after being closed due to the coronavirus pandemic.
The Dow Jones industrial average climbed 131.14 points to end at 26,156.10, after futures briefly shed 400 points Monday evening on trade worries with China. The Standard & Poor’s 500 added 0.4% to close at 3,131.29, retracing losses after dropping 1% overnight.
The Nasdaq Composite rose 0.7% to close at a fresh record of 10,131.37, its eighth consecutive day of gains, helped by strong gains from Apple after the company unveiled new features for its iPhones and Mac computers at its annual WorldWide Developers Conference.
Technology sector stocks, which led the way higher as the market rebounded the past three months from a 34% plunge, helped power the latest gains. Health care stocks and companies that rely on consumer spending were among the big gainers. Real estate and utilities stocks fell.
Bond yields rose slightly, another sign that investors were regaining confidence in the economy.
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Investors appeared to look past reports of surging coronavirus cases in the U.S. and other countries to focus on evidence of economic recovery. On Tuesday, Federal health officials told Congress to brace for a second wave of coronavirus infections in the fall and winter of this year.
Volatility has picked up in recent weeks after stocks rebounded more than 40% from their March lows on hopes the worst of the pandemic was over. The near-term trajectory for the financial markets depend on several factors, analysts caution, including the spread of the virus, the development of treatments to lower mortality rates and ultimately the development of a successful vaccine.
“While cases of new infections are rising in some countries and remain stubbornly high in others, there has not been a second wave of the coronavirus as yet in countries that quickly quarantined,” analysts at T. Rowe Price said in a note. “However, it could take months to get meaningful portions of the public vaccinated.”
Investors have been placing more weight on economic data releases that suggest economies that have reopened are making strides to emerge from a deep recession.
Sales of new single-family 真人百家家乐官网网站homes, a leading housing market indicator, rose more than expected in May, a sign the housing market is recovering in the wake of the pandemic. New 真人百家家乐官网网站home sales jumped 16.6% last month to a seasonally adjusted annual rate of 676,000 units, the Commerce Department said Tuesday.
Further updates on the U.S. economy are expected toward the end of this week, when the government will issue data on consumer spending, weekly unemployment aid applications and durable goods orders.
Stocks bounced back from overnight losses after Washington reassured investors that the trade accord with China was still intact.
Investors were spooked by reported comments by White House trade adviser Peter Navarro suggesting the U.S. trade deal with China was in trouble. Navarro, however, said his comments were taken out of context, and President Donald Trump tweeted that the agreement with China, the basis for a truce in a tariff war over technology and other problems, is still on.
Comments by either side suggesting progress or problems with the trade agreement have added to the uncertainties prevailing in the midst of the pandemic, pushing and pulling at share prices. The Federal Reserve and other global central banks have intervened to calm markets in recent months in an effort to restore confidence among investors after the pandemic battered the global economy.
“It appears this administration is ever so confused as the president says one thing and his trade advisor says another,” Peter Cardillo, chief market economist at Spartan Capital Securities, said in a note. “We believe these types of uncertainties could lead to another round of unsettled markets in spite of the Fed's printing presses working at full speed.”
After some early losses, global markets pressed higher in Asia and Europe.
The yield on the 10-year Treasury note rose to 0.72% from 0.70% late Monday. It tends to move with investors’ expectations for the economy and inflation.
Benchmark U.S. crude oil fell 9 cents to settle at $40.37 a barrel. Brent crude, the international standard, dropped 45 cents to close at 0.5% to $42.63 per barrel.
In Europe, France’s CAC 40 gained 1.4%, while Germany’s DAX rallied 2.1%. Britain’s FTSE 100 gained 1.2%. Japan’s benchmark Nikkei 225 added 0.5%. Hong Kong’s Hang Seng index jumped 1.6% and South Korea’s Kospi climbed 0.2%. The Shanghai Composite gained 0.2%.
Contributing: The Associated Press