S&P 500 breaches 3,000 mark for first time since early March
(C) Reuters. New York Stock Exchange opens during COVID-19
By Medha Singh and Uday Sampath Kumar
(Reuters) – U.S. stocks jumped and the S&P 500 breached 3,000 points on Tuesday as optimism about a potential coronavirus vaccine and a revival in business activity helped investors overlook simmering Sino-U.S. tensions.
The benchmark index traded above the key psychological level for the first time since March 5, but came off session highs as White House adviser Larry Kudlow said President Donald Trump was “so miffed with China on virus and other matters that the trade deal is not as important to him as it once was”.
The S&P 500 has risen about 37% from its March lows on a raft of central bank and government stimulus and is now just about 11% below its February record high.
On Monday, California decided to reopen in-store retail businesses and places of worship from one of the most restrictive shutdowns in the United States.
“People have been locked up and when they see sparkles of hope like vaccines, that drives optimism probably ahead of where it should be and clearly ahead of the economy,” said Richard Steinberg, chief market strategist at Colony Group in Florida.
Data showed U.S. consumer confidence nudged up in May, adding to hopes the worst of the impact of the shutdown in economic activity was probably in the past.
At 11:41 a.m. ET, the Dow Jones Industrial Average (DJI) was up 605.49 points, or 2.47%, at 25,070.65, the S&P 500 (SPX) was up 50.32 points, or 1.70%, at 3,005.77, and the Nasdaq Composite (IXIC) was up 66.52 points, or 0.71%, at 9,391.11.
U.S. biotech group Novavax Inc (O:NVAX) jumped 14.7% as it joined the race to test coronavirus vaccine candidates on humans and enrolled its first participants. Merck & Co Inc (N:MRK) added 2.3% as it announced plans to develop two separate vaccines.
But with U.S. unemployment soaring beyond 14% and macroeconomic data pointing at a deep recession, analysts warned financial markets could be betting on too fast a recovery.
“The impact on the economy and corporate earnings will be seen for several quarters (and) I’m not sure if it has been completely baked into the equity prices,” Robert Wyrick, chief investment officer at Post Oak Private Wealth Advisors in Houston, Texas told the Reuters Global Markets Forum.
Beaten down travel-related stocks soared, with S&P 1500 airlines index <.spcomair> up 10.8% and cruise operators including Carnival Corp (N:CCL) more than 12.3%.</.spcomair>
Advancing issues outnumbered decliners more than 6-to-1 on the NYSE and 3-to-1 on the Nasdaq.
The S&P index recorded 13 new 52-week highs and no new low, while the Nasdaq recorded 96 new highs and seven new lows.
S&P futures scale 3000: https://fingfx.thomsonreuters.com/gfx/mkt/jbyvrljamve/Pasted%20image%201590479196024.png
S&P 500 tops 3,000 on hopes of economic recovery, COVID-19 vaccine
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