Wall Street up as recovery hopes overshadow virus worries

Stocks surged on Wall Street in morning trading Tuesday, driving the S&P 500 to its highest level in nearly three months, as hopes for economic recovery overshadow worries about the coronavirus pandemic.

The S&P 500 was up 2 per cent to 3,015 points. It's the first time the benchmark index has been above the 3,000-point mark since March 5, before the widespread business shutdowns aimed at slowing the spread of the outbreak sent the U.S. economy into a sharp skid.

The Dow Jones Industrial Average climbed 667 points, or 2.7 per cent, to 25,141. It's the first time the Dow is above 25,000 points since March 10.

The Nasdaq rose 1.3 per cent and the Russell 2000 index of small companies gained 3.8 per cent. Financials, technology and industrial stocks powered much of the broad gains.

The post-Memorial Day rally followed a strong rise in global markets as more nations push to open their economies.

The S&P 500 was coming off a solid week and is on track for a second-straight month of gains. The index remains down 11.2 per cent from its all-time high in February.

Bond yields were broadly higher, in another sign of optimism. The yield on the 10-year Treasury note, a benchmark for interest rates on many consumer loans, rose to 0.70 per cent from 0.66 per cent late Friday.

Oil prices rose. Benchmark U.S. crude oil was up 1.4per cent to USD 33.69 a barrel. Brent crude oil, the international standard, was up 0.7 per cent to USD 36.37 a barrel.

Fears of a crushing recession due to the coronavirus sent the S&P 500 into a skid of more than 30 per cent from its February high.

Hopes for a relatively quick rebound and unprecedented moves by the Federal Reserve and Congress to stem the economic pain drove a historic rebound for stocks in April and have bolstered optimism that the market won't return to the depths seen in March.

Fresh optimism about the development of potential vaccines for COVID-19 have also helped spur stocks higher. Investors are now keenly focused on the process of reopening the U.S. economy, which is likely to continue accelerating as the summer progresses.

Concerns remain that the reopening of businesses could lead to another surge in infections, potentially hobbling efforts to get the nation's battered economy growing again.

Reassuring comments by the head of China's central bank helped spur buying in global markets Tuesday.

France's CAC 40 climbed 1.7 per cent as the government was due to unveil support for the auto industry. Germany's DAX gained 1.3 per cent and the FTSE 100 in Britain, which was closed on Monday, rose 1.1per cent. Asian markets closed higher.

In another confidence-boosting development on Wall Street, the New York Stock Exchange reopened its trading floor Tuesday for the first time since mid-March, when it closed due to the coronavirus outbreak.

New York Gov. Andrew Cuomo rang the opening bell at the NYSE, which allowed a limited number of traders back to the floor. It required that traders adhere to social distancing guidelines and wear masks.

“The message of the NYSE reopening is symbolic not only for our community and our country, but it is for the globe,” said Jonathan Corpina, senior managing partner at Meridian Equity Partners and one of the NYSE floor traders.

“It's showing that we are ready to reopen our economy and reopen our country and move things in the right direction.” 

(image credit: AP)