(Reuters) – The S&P 500 and the Dow Jones indexes hit three-month highs on Tuesday as optimism about the reopening of the economy after weeks of coronavirus lockdowns countered concern over more disruptions from the street protests spread across the country.
FILE PHOTO: Traders wear masks as they work on the floor of the New York Stock Exchange as the outbreak of the coronavirus disease (COVID-19) continues in the Manhattan borough of New York, U.S., May 27, 2020. REUTERS/Lucas Jackson
Stocks in the cyclical sectors, including financials, industrials and energy, provided the biggest boost to the two indexes.
Improving economic data, trillions of dollars in stimulus and the restarting of businesses have helped the benchmark S&P 500 recover about 40% from its March lows, leaving it just about 10% below a record high hit in mid-February.
The blue-chip Dow is down 13% from its all-time high, while the tech-heavy Nasdaq remains about 3% below that level.
“The U.S. equity market continues to rally despite the fact that we’re clearly in a recession,” said Keith Bliss, managing partner at iQ Capital (USA) LLC.
“Most investors believe that companies will be able to come out of this on the other side, actually in better shape … more efficient and more streamlined.”
Traders were keeping a close eye on tensions between the United States and China over the novel coronavirus and trade, as well as the anti-police brutality marches and rallies that have turned violent in some cities.
Overnight, demonstrators set fire to a strip mall in Los Angeles, looted stores in New York City and at least five police officers were hit by gunfire, hours after President Donald Trump vowed to deploy the U.S. military to regain control.
“If this goes on much longer the market will start to reflect the nervousness of the populace and the economy here in the United States,” iQ Capital’s Bliss said.
At 12:55 p.m. ET, the Dow Jones Industrial Average was up 154.32 points, or 0.61%, at 25,629.34, the S&P 500 was up 8.25 points, or 0.27%, at 3,063.98. The Nasdaq Composite was down 11.31 points, or 0.12%, at 9,540.74.
Technology-focused companies, including Amazon.com, Facebook Inc and Apple Inc which have led the market recovery, were marginally lower on Tuesday.
Shares of Western Union jumped 11% after a report the money transfer company had made an offer to buy its smaller rival MoneyGram International Inc.
MoneyGram shares soared 33%.
Raytheon dipped 0.6% after the U.S. weapons maker forecast downbeat 2020 free cash flow outlook as commercial aerospace sales plunge due to the coronavirus crisis.
Advancing issues outnumbered decliners by a 2.84-to-1 ratio on the NYSE and by a 1.68-to-1 ratio on the Nasdaq.
The S&P index recorded 10 new 52-week highs and no new lows, while the Nasdaq recorded 63 new highs and four new lows.
Reporting by Devik Jain and Medha Singh in Bengaluru, Pawel Goraj in Gdansk; Editing by Saumyadeb Chakrabarty, Bernard Orr and Uttaresh.V