por admin » Mié Jun 03, 2020 9:34 am
Dow jumps 300 points in third day of gains as data shows economy is recovering from coronavirus
PUBLISHED TUE, JUN 2 20206:06 PM EDTUPDATED MOMENTS AGO
Fred Imbert
@FOIMBERT
Maggie Fitzgerald
@MKMFITZGERALD
Stocks rose on Wednesday on the back of better-than-expected economic data, which bolstered optimism over the recovery from coronavirus-led shutdowns.
The Dow Jones Industrial Average jumped 302 points, or 1.2%. The S&P 500 gained 0.9% while the Nasdaq Composite advanced 0.4%. Wednesday’s gain put the Dow on pace for its third consecutive gain.
The Nasdaq 100 index, which tracks the 100-largest nonfinancial companies in the Nasdaq Composite, was less than 0.5% from its record high set Feb. 19. The index has rallied 42.6% from an intraday low set on March 23. Those gains have been provided in large part by stocks that benefited from people staying at home due to the coronavirus. The Invesco QQQ Trust — which tracks the Nasdaq 100 — traded 0.2% higher.
ADP and Moody’s Analytics reported private payrolls fell by another 2.76 million in May. The ADP number was far less than the 8.75M estimate. The reason for the wide disparity was not immediately clear. Data from the Institute for Supply Management showed the U.S. services sector contracted less than expected, rebounding from an 11-year trough.
“Equities are off to a very good start in June,” said Gregory Faranello, head of U.S. rates trading at AmeriVet Securities, in a note. “Looking past some clear roadblocks, risk assets continue to move forward off the back of brighter days, reopening the economy and trillions in liquidity.”
The S&P 500 is up more than 1% so far in June, bringing its gain from its pandemic low in March to more than 40%.
Stocks poised to benefit from the economy reopening rose broadly on Wednesday. American, Delta and United Airlines all gained more than 2%. JPMorgan Chase, Wells Fargo and Bank of America also climbed at least 2.9% each.
Meanwhile, shares of companies that surged during stricter stay-at-home orders lagged. Amazon dipped 0.1% and Netflix slid 0.9%. Zoom Video and Shopify dropped 1.1% each.
Gold futures — a traditional safe haven for investors along with Treasurys — dropped more than 2% to $1,697.40 per ounce. Treasury yields jumped, pushing prices lower. The 10-year Treasury yield traded more than 7 basis points higher at 0.75%.
On Tuesday, stocks rose as optimism around reopening businesses overshadowed concerns about the global pandemic, U.S.-China trade tensions and nationwide protests. Nationwide protests were largely calm on Tuesday evening.
“Despite several issues of importance — national riots, Chinese relations, an ongoing pandemic — the stock market is primarily focused on a single thing: the restart of U.S. and global economic activities,” Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC.
“The broader stock market (i.e., small cap stocks, cyclical sectors, international stock markets and emerging stock markets) is increasingly participating more pronouncedly in this rally suggesting the recession is ending,” Paulsen added.
Wharton professor Jeremy Siegel said the stock market rally still has further to go thanks to the massive support from the Federal Reserve.
“I think this rally has further to go. It has all those doubters there but it’s the liquidity that the Fed provided that I think is the prime determinant,” Siegel said on CNBC’s “Closing Bell.”
While stocks have largely shrugged off unrest around the country, federal and local governments are taking action. Major cities like New York and Chicago have imposed curfews in an effort to dissipate the mass gatherings. President Donald Trump said Monday night he will deploy the military if states and cities failed to quell the demonstrations.
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