Dow climbs 461 points as economic reopening spurs recovery hopes
stocksrose on Monday to a 15-week high as economic recovery hopes led to rallies in airlines, cruise lines, and retail.
- The S&P 500 wiped out its year-to-date loss in the final minutes of trading.
- The gains continue a rally from Friday that came after the better-than-expected May jobs report provided investors an encouraging sign.
- Oil producers jumped following OPEC's agreement to extend historic production cuts, but oil slumped.
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US stocks rose on Monday to a 15-week high as economic recovery hopes extended the prior week's rally. Airlines, cruise lines, and retail were among the groups to contribute to gains.
The benchmark S&P 500 wiped out its year-to-date loss in the final minutes of trading.
Investors were encouraged on Friday after a much stronger-than-expected May jobs report shocked economists who expected greater fallout from the coronavirus. New data showed that unemployment actually declined, despite forecasts for an increase. US employers also added 2.5 million jobs, bucking forecasts for deeper losses.
Here's where US indexes stood at the 4 p.m. ET market close on Monday:
- S&P 500: 3,232.39, up 1.2%
- Dow Jones industrial average: 27,572.44, up 1.7% (461 points)
- Nasdaq composite: 9,924.75, up 1.1%
"This time it is not only being led by Big Tech and biotech firms, but also the most beaten-up sectors such as airlines and leisure are surging," said Hussein Sayed, chief market strategist at FXTM.
He continued: "That is what you'd like to see as a signal of a broader economic recovery, but the big question remains - are we truly witnessing a broader economic recovery or is it a false signal from equity
On Monday, famed investor Stanley Druckenmiller said he'd been humbled by markets after missing out on the rally. In addition, strategists at Bank of America called 'mea culpa' and raised its S&P 500 target after missing out.
Over the weekend, the Organization of Petroleum Exporting Countries agreed to extend their earlier historic production cuts, but only through the end of next month. West Texas Intermediate crude slumped as much as 4%, to $37.96 per barrel, on Monday. International benchmark Brent crude declined 3.8%, to $40.68 per barrel, at intraday lows.
Next, investors will be watching the Federal Reserve's policy meeting this week for more future guidance. There's also a chance that the central bank could target yield-curve control.
While investors are confident about reopening efforts, there are worries that a second wave of COVID-19 cases could further devastate the US economy. On Monday, the National Bureau of Economic Research —the arbiter of recession dates— officially stated that a US recession began in February.
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