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Stocks rally on reopening, stimulus hopes

Published 05/20/2020, 07:00 AM
Updated 05/20/2020, 03:10 PM
© Reuters. The New York Stock Exchange (NYSE) is seen in the financial district of lower Manhattan during the outbreak of the coronavirus disease (COVID-19) in New York

© Reuters. The New York Stock Exchange (NYSE) is seen in the financial district of lower Manhattan during the outbreak of the coronavirus disease (COVID-19) in New York

By Chuck Mikolajczak

NEW YORK (Reuters) - The three major averages on Wall St were poised for their fourth gain in five session on Wednesday as investors again bet on a swift economic recovery from coronavirus-driven lockdowns and the potential for more stimulus measures from the Federal Reserve.

The S&P 500 stands at a two-month high and was briefly above its 100-day moving average, a closely watched technical indicator that has acted as a resistance level. The Nasdaq was trading at its highest level in three months and was about 5% below record levels, as shares of Facebook Inc (NASDAQ:FB) and Amazon.com Inc (NASDAQ:AMZN) surged to all-time highs.

Gains were broad-based, with each of the 11 major S&P sectors on the plus side. The small-cap Russell 2000 index, which usually leads gains out of a recession, outperformed the large-cap indexes.

Still, with economic data likely to be dismal in the coming weeks, there is concern that stocks may have gotten ahead of themselves, with the S&P up nearly 33% from its March 23 closing low.

"Once the economy shut down, we had very little clarity with respect to numbers and measurements, the whole marketplace is sort of flying blind," said Mike Zigmont, head of trading at Harvest Volatility Management in New York. "This market is swept up in a very powerful trend and along the way it is very confident in itself. There hasn’t been much doubt that we are over our skis."

Minutes from the Federal Reserve's most recent policy meeting showed the central bank pledged to act as appropriate to support the economy until it is on track to recovery, a sentiment that Fed Chair Jerome Powell has voiced in recent days.

The Dow Jones Industrial Average rose 360.8 points, or 1.49%, to 24,567.66, the S&P 500 gained 47.95 points, or 1.64%, to 2,970.89, and the Nasdaq Composite added 174.88 points, or 1.9%, to 9,359.99.

Lawmakers in the U.S. House of Representatives plan to vote again next week on giving small businesses more time to utilize their coronavirus aid under the Paycheck Protection Program, House Speaker Nancy Pelosi said on Wednesday.

As states across the country begin to loosen restrictions, hopes for an economic rebound have grown. The NYSE Arca airlines index jumped 5.35% as Delta Air Lines Inc (NYSE:DAL)'s chief executive officer said he was confident travel will return in the next 12 to 18 months.

Target Corp (NYSE:TGT) lost 2.86% after the big box retailer reported a 64% plunge in quarterly profit, as costs related to the coronavirus outbreak outweighed a surge in online sales.

Advancing issues outnumbered declining ones on the NYSE by a 4.05-to-1 ratio; on Nasdaq, a 3.53-to-1 ratio favored advancers.

© Reuters. The New York Stock Exchange (NYSE) is seen in the financial district of lower Manhattan during the outbreak of the coronavirus disease (COVID-19) in New York

The S&P 500 posted 13 new 52-week highs and no new lows; the Nasdaq Composite recorded 74 new highs and nine new lows.

Latest comments

Delta airlines is confident that travel will return in the next 12-18 months. If the markets are forward looking as they say, and travel return is 12-18 months off, I hardly see how there will be a travel industry.
I just need 13% correction. I was earning daily with my strategy for 3 months using TQQQ and SQQQ then I got sucked in on SQQQ because markets went up too fast and I made a mistake investing 66% instead of only another 33%. Now my strategy is rocket market proof.
Bernie Sanders may have a point. Why should taxpayer money be funneled to such a ridiculously small percentage of the population?
I could not believe myself, but I agreed with him when he said it few weeks ago.
Yippee ki yay mtfk insane market
Full recovered Nasdaq.America is great.Yipppeee.Hopefully tax increases in stages on middle class salary.
It's the truth. Markets are the endless well of money supply, that money comes from so called middle class.
Government will manipulate the COVID test and death numbers to show economy reopen proceeds smoothly. The market will be up in most of the future days until the election day. FED is determined to push the national debt from over 25 trillion now to 30 trillion within a year which means another 3-5 trillion free money will get into market in a year.
100k death in us by next week. This is the only real fact. All the rest is bouble!
Printer Powell mumbled last weekend that markets may experience a liquidity difficulties. They stepped away from printer in September last year and then in mid February this year, on both occasions we know what happened next.
Why do these writers even have a title to these articles? Just say "futures up again, courtesy of the Fed" and leave it at that.
Said Charalambos ********ouros, senior market analyst at JFD Group. A broker who is most likely heavy on the short side. ;-)
trump buys more stocks to expand his ever growing empire
the white house is manipulating tge market for the next election
Somebody impeach him.
so??? juz follow the trend and long .
they already impeached him, it failed
plz nasdaq armageddon
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