The U.S. economy just had its worse performance ever as businesses shut down across the country as well as much travel decline.
U.S. stocks rebounded Wednesday from a late slide a day earlier, with the Standard & Poor’s 500 edging closer to its February record.
The S&P 500, the broadest measure of U.S. stocks and the index used as a benchmark for index funds, gained 1.2%, leaving it within 0.4% of its all-time high it set in February. It’s on pace for its eighth day of gains in the past nine.
The Dow Jones industrial average climbed 200 points, off about 5% from its February peak. The technology-heavy Nasdaq Composite rose 1.5% after hitting a record earlier this month.
Technology companies and banks were doing especially well as the day got going, and energy companies were also higher following an uptick in the price of oil.
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The stunning turnaround for the S&P 500 from a nearly 34% tumble in March, when the coronavirus pandemic sent stocks into a nosedive, shows investors gaining confidence from improved economic data and better-than-expected second-quarter corporate results.
Stocks have bounced back thanks partly to unprecedented financial aid from the Federal Reserve and Congress in the spring to prop up the economy. But a discouraging lack of progress on talks between lawmakers in Washington and the White House over more economic aid has dogged trading this week, analysts say.
On Monday, Treasury Secretary Steven Mnuchin said the White House was open to resuming stimulus talks with Democrats after negotiations broke down last week.
“The labor market continues to climb its way out of the hole created by COVID-19,” analysts at Glenmede, a wealth management firm, said in a note. “This highlights the importance of ongoing fiscal stimulus, to help stabilize the demand-side of the economy amid the ongoing pandemic.”
The United States has reported more than 5 million coronavirus cases and nearly 165,000 deaths, according to a tally kept by Johns Hopkins University. Worldwide, there have been almost 750,000 deaths and more than 20 million cases.
Optimism has grown for a vaccine. Drugmaker Moderna climbed 2% after entering a deal with the U.S. to produce 100 million doses of its potential coronavirus vaccine for around $1.5 billion.
Shares of electric car maker Tesla jumped 7% after saying it would do a 5-for-1 stock split, making its shares more affordable following a giant run-up this year.
Bank stocks rose broadly, with JPMorgan Chase, Bank of America and Citigroup each up nearly 1%.
The yield on the 10-year Treasury rose to 0.67% from 0.66% late Tuesday. It’s jumped sharply since sitting at 0.57% late Monday.
A report on Wednesday showed that inflation remains very low, but it ticked up more last month than economists expected. Economists debated how much value the report has, given that inflation is likely to remain weak as long as the pandemic is flattening the economy.
But if inflation were to reappear, it could weaken the Federal Reserve’s commitment to keeping interest rates low and draw some investors away from stocks.
The recent rise in yields has also slowed the supersonic ascent for gold recently. The metal’s price has shot to record highs this year, benefiting from increased demand by investors looking for safety amid the pandemic but not interested in the low yields offered by bonds.
Gold for delivery in December dropped by more than $90 per ounce on Tuesday. It clawed back a bit of that Wednesday morning, adding $5.10 to $1,951.40 per ounce.
In Europe, Britain’s FTSE 100 gained 1.2%. The CAC 40 in Paris edged 0.4% higher and Germany’s DAX slipped 0.1%.
In Asian trading, Tokyo’s Nikkei 225 gained 0.4%, while Hong Kong’s Hang Seng rebounded from early losses, surging 1.4%. In South Korea, the Kospi gained 0.6% in a late comeback. The Shanghai Composite index lost 0.6%.
Contributing: The Associated Press
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