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 waffled between gains and losses Tuesday, with the S&P 500 briefly climbing above its record closing high it last set in February before the pandemic pummeled the global economy.
The S&P 500, the broadest measure of U.S. stocks and the index used as a benchmark for index funds, was virtually unchanged after it had eclipsed its all-time closing high in early trading, a level it last closed at on Feb. 19 before the pandemic shut down businesses worldwide and created the worst recession in decades.
It’s the fourth time in the past five days that the S&P 500 climbed above its record closing high of 3,386.15. Each earlier time, the index faded back below that record level by the afternoon.
The Dow Jones industrial average fell 100 points, off 6% from its February peak. The technology-heavy Nasdaq Composite climbed 0.2%, extending gains after hitting a fresh record on Monday.
Trading has been quiet in recent days, after a big rally since the spring. The turnaround for the S&P 500 from a nearly 34% tumble in March, when the pandemic sent stocks into a nosedive, shows investors gaining confidence from improved economic data and better-than-expected second-quarter corporate results.
“Although pandemic risks will likely linger well into next year—even with success on a vaccine—the U.S. and global economies are showing impressive resiliency and an ability to recover despite the ongoing health crisis,” Jim Paulsen, chief investment strategist at investment management and research firm Leuthold Group, said in a note.
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Technology companies again led the way higher, offsetting losses elsewhere. Business software maker Oracle climbed 5% following a report that it was interested in making its own bid to acquire the U.S. operations of TikTok, a Chinese video app.
Investor sentiment got a boost following a batch of strong second-quarter earnings results from major retailers, signaling the strength of the U.S. consumer during the pandemic. Home Depot and Walmart both topped Wall Street earnings expectations, though shares were little changed in early trading.
Data released Tuesday showed the housing market was improving after the virus outbreak paralyzed the American economy in the spring.
Construction of new U.S. homes surged 22.6% last month as homebuilders bounced back from a lull induced by the pandemic. New homes were started at an annual pace of nearly 1.5 million in July, the Commerce Department reported Tuesday, highest since February and well above what economists were expecting.
Markets were also buoyed by developments in Washington, after Speaker Nancy Pelosi called the House back into session, cutting short the lawmakers’ summer recess for a vote expected Saturday on legislation to prohibit changes in the U.S. Postal Service amid growing concerns that the Trump administration is trying to undermine the agency ahead of the November election.
The proposed package will also include $25 billion to shore up the Postal Service, which is suffering losses. But prospects for additional economic aid for American workers and businesses remain uncertain after talks on a fresh stimulus package stalled.
Investors say it’s crucial that the support comes, particularly after $600 in weekly unemployment benefits and other stimulus from the U.S. government expired.
Without more help for the U.S. economy, analysts say the recovery that investors have been assuming is on the way won’t materialize. And that assumption is a huge reason the stock market is as high as it is.
The yield on the 10-year Treasury dipped to 0.67% from 0.69% late Monday.
Benchmark U.S. crude oil fell 1% to $42.47 per barrel. Brent crude, the international standard, slipped 0.5% to $45.15 per barrel.
Gold added 1% to $2,018.90 per ounce.
Overseas, Britain’s FTSE 100 rose 0.3%, while the DAX in Frankfurt rose 0.9%. In Paris, the CAC 40 gained 0.5%.
In Asia, South Korea’s Kospi led regional losses, slumping 2.5% amid worries over surging coronavirus cases. Hong Kong’s Hang Seng index lost 0.2%. Japan’s Nikkei 225 slipped 0.2%. Australia’s S&P/ASX 200 gained 0.8%, while the Shanghai Composite index edged 0.4% higher.
Contributing: The Associated Press
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