The U.S. economy just had its worse performance ever as businesses shut down across the country as well as much travel decline.
The Standard & Poor’s 500 index closed a hair below its February record high on Wednesday, nearly erasing all of its losses following a historic downturn during the coronavirus pandemic.
Big technology stocks once again lead the way higher. Giants like Apple, Microsoft and Amazon have been the year’s biggest winners, carrying the stock market through the pandemic despite the worries about the economy, on expectations they’ll continue to deliver strong growth regardless of whether people are quarantined.
Shares of electric car maker Tesla jumped 13% after saying it would do a 5-for-1 stock split, making its shares more affordable following a giant run-up this year.
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The S&P 500, the broadest measure of U.S. stocks and the index used as a benchmark for index funds, gained 1.4% to 3,380.35, leaving it within 0.2% of its all-time high it set in February. It notched its eighth day of gains in the past nine.
The Dow Jones industrial average climbed 289.93 points to 27,976.84, off 5.3% from its February peak. The technology-heavy Nasdaq Composite rose 2.1% to 11,012.24, after hitting a record earlier this month.
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 0.8% after entering a deal with the U.S. to produce 100 million doses of its potential coronavirus vaccine for around $1.5 billion.
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.
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 2%. The CAC 40 in Paris rose 0.9% and Germany’s DAX added 0.9%.
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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