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Stocks extend gains on Wall Street to a 3rd straight day
Published Tuesday, June 2, 2020 3:59AM EDT Last Updated Tuesday, June 2, 2020 3:17PM EDT
TOKYO -- Stocks are closing higher on Wall Street for the third day in a row, continuing a stretch of gains for the market. Major indexes wavered through the morning then turned solidly higher late in the day. The S&P 500 rose 0.8%. The gains came despite spreading unrest in the U.S. as investors hope that the gradual lifting of lockdown provisions will help economies recover from the damage caused by the coronavirus outbreak. Energy stocks far outpaced the rest of the market as the price of crude oil rose again. Bond yields rose, another sign that pessimism is ebbing.
THIS IS A BREAKING NEWS UPDATE. AP's earlier story is below:
U.S. stock indexes are moving broadly higher in afternoon trading Tuesday, following broad gains in global markets as investors hope that the gradual lifting of coronavirus lockdown mandates will put economies ravaged by the outbreak on the path to recovery.
The S&P 500 was up 0.3%. Industrial, technology, financial and other stocks that would stand to benefit the most from a growing economy moved higher. Energy companies also rose as the price of crude oil headed higher. Communication services stocks and household goods makers lagged. Bond yields were mostly higher, another sign of ebbing pessimism among investors.
The modest gains have the S&P 500 on track for a three-day winning streak, extending the benchmark index's remarkable two-month rally off a steep skid in February and March as broad swaths of the U.S. economy ground to a halt due to the coronavirus pandemic.
So far, Wall Street's momentum has not been derailed by the wave of daily unrest across the U.S. that began last week in Minneapolis as a protest over police brutality. Cities across the country have been rocked by violence and destruction for seven days in a row, spurring threats from the White House to send troops in to put down the unrest.
"The market action seems to have a lot more to do with people's confidence about the economic reopening," said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management. "It's happening irrespective to what we're seeing socially across the country right now."
The Dow Jones Industrial Average gained 112 points, or 0.5%, to 25,590. The Nasdaq composite, which is heavily weighted with technology companies, was flat after having been down 0.8% in the early going. Smaller company stocks had some of the biggest gains. The Russell 2000 index was up 0.9%.
NASA astronauts launched into space by SpaceX on Saturday rang the opening bell from the International Space Station early Tuesday to kick off trading on the Nasdaq.
Stocks have now recouped most of their losses after the initial economic fallout from the coronavirus knocked the market into a breathtaking 34% skid in February and March. The S&P 500 is now down just under 10% from its all-time high in February.
Investors are hoping that the worst of the recession has already passed, or will soon, as governments around the country and around the world slowly lift restrictions meant to corral the outbreak.
In Europe, France's CAC 40 jumped 2% Tuesday as the country opened restaurants, cafes, parks and beaches and launched a contract tracing app to help keep tabs on new contagions. Germany's DAX, which had been closed Monday, caught up with previous global markets' gains and surged 3.7%. Britain's FTSE 100 added 0.9%. Markets in Asia closed broadly higher.
While more countries and sectors are reopening, economic activity is expected to remain subdued as social distancing rules complicate plans to get back to business. Meanwhile, investors continue to keep an eye out for any signs that the reopening of the economy is leading to a resurgence in COVID-19 cases. Tokyo had 34 new confirmed cases Tuesday. The daily numbers had dropped below 20 recently.
Even so, Wall Street is betting that the U.S. government and others will not move to close the economy again even if there is a pickup in new cases.
"There's just a lack of appetite for a potential re-shutdown in the event that the virus accelerates from here," Hainlin said.
Bond yields were mostly higher. The yield on the 10-year Treasury rose to 0.68% from 0.66% late Monday.
Oil prices rose. Benchmark U.S. crude oil for July delivery was up 3.8% to $36.78 a barrel. Brent crude oil for August delivery rose 3.3% to $39.58 a barrel.