NEW YORK (Reuters) – U.S. stocks posted modest gains on Tuesday as market participants looked past widespread social unrest and pandemic worries to focus instead on lifting lockdown restrictions and signs of economic recovery.
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
Cyclical stocks like financials and industrials gave the biggest lift to the S&P 500 and the Dow, while tech shares boosted the Nasdaq.
“There is that rotation going on as traders add more risk to their portfolios with securities that have been beaten up and should benefit as the economy recovers,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.
“That’s what the market has been reaching for lately – the battle between growth and value for leadership of the market.”
The Nasdaq, the S&P 500 and the Dow have been approaching their all-time closing highs in recent weeks and are now about 3%, 9% and 13%, respectively, below record closing levels.
Nationwide, violent protests over the death of a black man at the hands of law enforcement officers continued unabated, even as President Donald Trump vowed to unleash the military on the demonstrators.
“Most of the focus is on the social unrest,” Ghriskey added. “We all hope calmer heads will prevail and we will address the issues at the root of it all. But this shouldn’t have any impact on the markets.”
But the green shoots of economic rebound driven in no small part by massive stimulus packages from Capitol Hill and the U.S. Federal Reserve has helped fuel investor optimism.
Market participants now await Friday’s crucial jobs report from the Labor Department for a clearer picture of the extent of economic damage wrought by mandated lockdowns. The report is expected to show the unemployment rate surging to a historic 19.7%.
The Dow Jones Industrial Average rose 157.21 points, or 0.62%, to 25,632.23, the S&P 500 gained 11.65 points, or 0.38%, to 3,067.38 and the Nasdaq Composite added 8.39 points, or 0.09%, to 9,560.44.
Of the 11 major sectors in the S&P 500, all but consumer staples and communications services were in the black.
The ARCA Airline index, whose constituents have been hit particularly hard by COVID-19-related restrictions, was up 3.3% boosted by a slow but steady increase in commercial air traffic.
Southwest Airlines Co rose 2.6% after extending buyout and paid leaves to employees in what its chief executive called an effort to “ensure survival.”
Shares of Slack Technologies Inc advanced 2.3% after Cowen initiated coverage of the workspace communication platform with an “outperform” rating.
A report that Western Union has made an offer to buy smaller rival MoneyGram International Inc sent the money transfer companies shares up by 11.0% and 30.1%, respectively.
Advancing issues outnumbered declining ones on the NYSE by a 2.60-to-1 ratio; on Nasdaq, a 1.52-to-1 ratio favored advancers.
The S&P 500 posted 11 new 52-week highs and no new lows; the Nasdaq Composite recorded 70 new highs and four new lows.
Reporting by Stephen Culp; Editing by Cynthia Osterman