U.S. stocks rose for a third day as optimism mounts that the global economy is on the rebound from the pandemic hit. Treasuries slipped.
The S&P 500 jumped back above 3,000 and its average price for the past 200 days, technical levels considered key by chart watchers.
The S&P/TSX composite index was up 13.37 points at 15,161.49.
In New York, the Dow Jones industrial average was up 345.12 points at 25,340.23. The S&P 500 index was up 22.12 points at 3,013.89, while the Nasdaq composite was down 26.69 points at 9,313.53.
For a second day, stocks most punished by the coronavirus, from Carnival Corp. to United Airlines, surged as investors anticipate a sharp uptick in spending on non-essential goods and services. The tech-heavy Nasdaq 100 Index retreated as investors shunned the high flyers that dragged equities off their lows throughout April and much of May. Rising tensions with China also weighed on chipmakers.
“The mood seems to be a glass-half-full way of looking at the world,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute. Good news confirms the constructive case and bad news is viewed as either transitory, not significant, or something that could easily be solved by more liquidity and fiscal measures.”
The Stoxx Europe 600 Index headed toward its third daily increase and Italy’s government bonds rose after details emerged of Europe’s package of grants and loans for up to 750 billion euros (US$823 billion) to overcome the region’s deepest recession in living memory. The euro gained versus the dollar, pound and Swiss franc.
Meanwhile, Asian stocks closed mixed in the wake of the latest Sino-American flare-up, and China’s yuan slipped, nearing its weakest level on record against the dollar. WTI crude oil was steady at about US$34 a barrel in New York.
Investors are taking the new U.S.-China friction — including possible sanctions over Beijing’s crackdown in Hong Kong — in stride as they drive global stocks to levels not seen since early March on hopes that economies are beginning to recuperate after a deep downturn.
The Federal Reserve’s “Beige Book” survey due for release later Wednesday may provide clues on the inflection point for the economy and near-term outlook for jobs.
The recent equity rally “is an indication that investors are getting optimistic about the reopening of the economy and the drug-treatment development,” Katerina Simonetti, senior portfolio manager at UBS Private Wealth, said on Bloomberg TV. “We hope that it will eventually lead to a normalization in the market, but we have to keep an eye on the re-emergence of virus cases.”
Elsewhere, Japanese equities advanced after Bloomberg reported that the Abe administration is compiling a new 117 trillion yen (US$1.1 trillion) stimulus package. Shares in Hong Kong and Shanghai fell.