Wall Street Closes Sharply Higher on Signs of Economic Rebound
Wall Street rallied broadly on Wednesday with the Nasdaq approaching record highs as signs of an economic recovery from mandated shutdowns helped investors look beyond U.S. social unrest and pandemic worries.
Financials, industrials and tech pushed the three major U.S. stock indexes well into the black. The S&P 500 and the Nasdaq each posted their fourth straight day of solid gains.
The Nasdaq, the S&P 500 and the Dow have rebounded sharply from March lows hit as coronavirus-related lockdowns shocked the stock market, and they are now 1.4%, 7.8%, and 11.1%, respectively, away from overtaking all-time closing highs set in February.
The Nasdaq 100 is now just over 0.1% below its February record, having briefly breached that level late in the session.
“There is growing confidence the U.S. economy can safely re-open, much as other economies such as China and Italy have successfully done,” said David Carter, chief investment officer at Lenox Wealth Advisors in New York. “Risk appetite for equities has been helped by optimism in the economy, as well as investors having few other alternatives.”
Nationwide protests over the death of an unarmed black man in police custody extended to an eighth night as protesters ignored curfews, but violence subsided after President Donald Trump threatened to deploy the military.
A spate of grim economic data was not as bad as economists feared, with ADP reporting many fewer private-sector job cuts in May than expected.
Market participants now await the U.S. Labor Department’s more comprehensive May jobs report, which is expected to show unemployment soaring to a historic 19.7%.
The Dow Jones Industrial Average rose 527.24 points, or 2.05%, to 26,269.89, the S&P 500 gained 42.05 points, or 1.36%, to 3,122.87 and the Nasdaq Composite added 74.54 points, or 0.78%, to 9,682.91.
Of the 11 major sectors in the S&P 500, all but healthcare closed in positive territory, with industrials and financials enjoying the biggest percentage gains.
Boeing Co gave the biggest boost to the blue-chip Dow, its shares rising 12.9% following news that billionaire investor Daniel Loeb’s Third Point had taken a stake in the company.
Lyft Inc jumped 8.7% after the ride-sharing platform reported rides increased 26% in May.
Microchip Technology Inc surged 12.3% after the chipmaker raised its forecast for current-quarter sales and profit.
Teleconferencing firm Zoom Communications Inc nearly doubled its annual sales expectations, but also reported a sharp rise in costs. Its shares were up 7.6%.
Cosmetics maker Coty Inc rose 13.4% after announcing it was in talks to collaborate on a beauty line with reality TV star Kim Kardashian West.
Campbell Soup Co beat earnings expectations and hiked its full-year forecast, but troubles meeting surging consumer demand sent its shares down 6.1%.
Advancing issues outnumbered declining ones on the NYSE by a 3.81-to-1 ratio; on Nasdaq, a 2.26-to-1 ratio favored advancers.
The S&P 500 posted 32 new 52-week highs and no new lows; the Nasdaq Composite recorded 96 new highs and four new lows.
Volume on U.S. exchanges was 12.62 billion shares, compared with the 11.45 billion average over the last 20 trading days.