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U.S. stocks extended gains Tuesday as governments inched toward letting businesses reopen and central banks stepped in with more support for ailing economies.
The Dow Jones Industrial Average climbed 300 points, putting the blue-chip average on track for five consecutive days of gains. The Standard & Poor’s 500 rose 1.2%.
Companies are watching as politicians detail plans to ease up on restrictions that were meant to slow the coronavirus pandemic but also have erased businesses and jobs. With central banks and governments promising huge amounts of aid for the economy, some investors are focusing on the potential return of growth as the outbreak levels off in some areas.
The coronavirus had killed more than 211,000 people globally as of Tuesday, according to Johns Hopkins University data, with more than 3 million confirmed cases — including nearly 990,000 in the U.S. More than 56,200 have died in the U.S.
“The question continues to be how long will this virus be with us and when can all businesses reopen,” Bruce Bittles, chief investment strategist at Baird, said in a note. “A positive economic forecast centers on the development of a virus vaccine and/or promising treatments. Additionally, we need to see a successful reopening of the economy state by state and a return to single-digit unemployment rates.”
The U.S. Federal Reserve is holding its own monetary policy meeting Tuesday and Wednesday, though it is not expected to add to the huge amounts of stimulus it has already deployed, though investors will be keen for more detail on the economic outlook.
The European Central Bank will hold its own meeting Thursday, and is likewise expected to mainly fill in details of its stimulus programs, or possibly tweak them, as it keeps an eye on a historic plunge in the economy.
A slew of corporate earnings announcements is lined up for this week. Nearly a third of the companies in the S&P 500 are scheduled to report how profitable, or otherwise, they were in the first three months of 2020 and, more importantly, perhaps talk about how they see future conditions shaking out. That includes the Big Five of Amazon, Apple, Facebook, Microsoft and Google’s parent, Alphabet, which together make up about a fifth of the index.
“The evolution, duration and impact of COVID-19 remain unknown,” Terry Sandven, chief equity strategist at U.S.Bank Wealth Management, said in a note. “A COVID-19 vaccine is critical. Until we have that, conditions will not be normal.”
The price of U.S. oil extended its losses, dropping $1.39 to $11.39 a barrel in electronic trading on the New York Mercantile Exchange. That added to a drop of $4.16 a barrel on Monday as investors worry about oversupply at a time when storage space for crude is scarce. Brent crude, the international standard, fell 10 cents to $22.97 a barrel.
In Europe, France’s CAC 40 gained 1.3%, while Germany’s DAX rose 1.5%. Britain’s FTSE 100 gained 1.5%. Japan’s benchmark Nikkei 225 surged Monday after the central bank lifted its ceiling on purchases of government bonds and other assets that it uses to pump more cash into the economy. It edged 0.1% lower Tuesday.
Elsewhere in Asia, South Korea’s Kospi gained 0.6% after fluctuating much of the day. Australia’s S&P/ASX 200 lost 0.2%. Hong Kong’s Hang Seng rose 1.2%, while the Shanghai Composite fell 0.2%.
Contributing: The Associated Press
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