Wall Street rises with economic hopes; bank stocks surge

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(Reuters) – US stocks rose on Wednesday, the S&P 500 closing above 3000 for the first time since March 5, as further easing of the blockages raised optimism for an economic recovery.

Traders wearing masks work, the first day of in-person trading since the closure during the epidemic of coronavirus disease (COVID-19) on the floor at the New York Stock Exchange (NYSE) in New York, United States United, May 26, 2020 REUTERS / Brendan McDermid

Bank stocks fueled the day’s advance, with the S&P 500 .SPSY financial index leading gains across the major sectors. The index has risen almost 10% in the past two sessions, its largest two-day increase since April 8 and 9.

JPMorgan Chase & Co (JPM.N) was the main gain on the financial index, up 5.8% as the stock surged for the second day in a row. Bank chief executive Jamie Dimon said Tuesday he expected JPMorgan to increase its credit reserves again in the second quarter, but there are signs that the economy is picking up.

After Wednesday’s bell, the head of JPMorgan’s corporate and investment banking division said second quarter revenues are expected to be 50% higher than the same period last year.

Continued easing of blockages, optimism about a possible COVID-19 vaccine and massive US stimulus have spurred recent market gains. Wednesday, Walt Disney Co (DIS.N) announced plans to begin reopening its Walt Disney World resort in Florida, the world’s largest theme park, in stages starting July 11, and MGM Resorts (MGM.N) has announced that it will reopen its four Las Vegas casinos on June 4.

“It’s all about liquidity and the hope that the economy will turn out well,” said Peter Cardillo, chief economist at Spartan Capital Securities in New York.

“The rally will continue, but I don’t think it will continue without a drop,” he said, noting that weak second quarter profits could give investors a “reality check”.

Technology stocks underperformed the broader market on Wednesday after leading the recent rally.

The Dow Jones Industrial Average .DJI rose 553.16 points, or 2.21%, to 25,548.27, the S&P 500 .SPX gained 44.36 points, or 1.48%, to 3,036.13 , and the Nasdaq Composite .IXIC added 72.14 points, or 0.77%, to 9,412.36.

Amid recent gains, US tensions with China have clouded the markets.

President Donald Trump said Tuesday that Washington will announce its response to China’s national security bill on Hong Kong before the end of the week. Secretary of State Mike Pompeo said Wednesday that Hong Kong no longer deserves special treatment under US law as it did when it was under British rule, which could potentially seriously damage its hub status. major financial.

Technology-related stocks are among the most sensitive to Chinese growth, said Sameer Samana, senior global market strategist at the Wells Fargo Investment Institute in St. Louis.

“If the market is going to go up from here, you’re going to have to have a larger stake, but you’re going to need these big-cap tech companies to go with the race because they’re such a big part of the benchmark,” said Samana.

Also on Wednesday, the Federal Reserve Beige Book report showed that US businesses continued to be pounded by the effects of the new coronavirus epidemic until mid-May.

Growing issues outnumbered declining ones on the NYSE by a ratio of 3.81 to 1; on the Nasdaq, a ratio of 2.21 to 1 favored the advancers.

Traders wearing masks work, the first day of in-person trading since the closure during the epidemic of coronavirus disease (COVID-19) on the floor at the New York Stock Exchange (NYSE) in New York, United States United, May 26, 2020 REUTERS / Brendan McDermid

The S&P 500 posted seven new 52-week highs and no new lows; Nasdaq Composite recorded 41 new highs and 10 new lows.

The volume of US trade was 12.86 billion shares, compared to 11.33 billion on average for the full session of the last 20 trading days.

(This story has been refiled to remove unnecessary words in the 3rd paragraph)

Caroline Valetkevitch’s report; Additional reports from Medha Singh and Susan Mathew to Bengaluru; Editing by Leslie Adler

Our standards:Principles of the Thomson Reuters Trust.

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