Wall Street closed broadly higher Wednesday, extending the market’s gains into a third day on hopes for a coming economic revival as larger swaths of the country relax stay-at-home mandates imposed due to the coronavirus pandemic and clear the way for more businesses to reopen.
Despite a choppy day of trading, banks and retailers posted strong gains on hopes that life can inch back toward normal as state governments relax stay-at-home orders.
Financial, industrial and health care stocks accounted for a big slice of the gains. Department store chains, which took some of the market’s worst losses earlier this year when worries about the recession were peaking, surged amid optimism that life can inch back toward normal.
“Today is a little bit of a follow-through from yesterday,” said Bill Northey, senior investment director at U.S. Bank Wealth Management. “This is optimism about the reopening of the U.S. economy and, really, the global economy.”
The Dow Jones Industrial Average soared 553.16 or 2.21% to 25,548.27.
The NASDAQ composite index bounced back from earlier losses to close up 52.07 or .55% to 9,442.05.
The S&P 500 was up 44.36 or 1.48% to 3,036.13.
The financial markets plummeted to some of the worst losses earlier this year when worries about the recession were peaking. Losses for big tech stocks and other, earlier winners of the stay-at-home economy were holding the gains in check Wednesday.
Stocks continued to rise sharply despite U.S.-Chinese tensions over Hong Kong, which kept some investors on edge.
A day earlier, Wall Street closed at its highest level in nearly three months on hopes the global economy might be recovering from its deepest slump since the 1930s as more countries reopen factories, shops and other businesses. The Dow was up more than 500 points Tuesday.
U.S. equity markets also rallied sharply as investor optimism grew.
Tech stocks were down earlier in the day as President Donald Trump threatened to shutter social media companies after Twitter fact-checked his unsubstantiated claims about vote-by-mail fraud.
Overseas, markets rose after the European Union proposed a new 750 billion-euro ($825 billion) package of financial aid meant to help the region's economy recover from what is already considered the deepest recession in living memory.
New feud with China
President Trump said Tuesday that he was working on a response to China’s legislative moves to establish more authoritarian control over Hong Kong but he declined to give details.
Trump is “displeased with China’s efforts and that it’s hard to see how Hong Kong can remain a financial hub if China takes over,” said White House press secretary Kayleigh McEnany.
Friction has already mounted between the world's two largest economies over the pandemic, which originated in China. Another contentious issues looms over whether Beijing is delivering on pledges to boost imports from the U.S. as part of a trade deal with Washington.
The law under consideration for Hong Kong by the Chinese legislature has prompted warnings it might erode the independence of courts and other elements that help to make the former British colony a business center.
The legislation would alter Hong Kong’s Basic Law, or mini-constitution, to allow Beijing to compel its government to enact laws. That would circumvent a local legislature that withdrew a proposed security law in 2003 following public protests.
Hong Kong’s leader tried Tuesday to reassure businesses and the public the law wouldn’t threaten civil liberties. Details haven’t been released, but the decision to enact the law reflects the determination of President Xi Jinping’s government to tighten control over Hong Kong following anti-government protests.
Benchmarks in Shanghai and Hong Kong retreated after the White House said a proposed national security law might jeopardize the Chinese territory’s status as a global financial center.
Hong Kong's Hang Seng lost 0.4% to 23,301.36 after falling as much as 0.7% earlier in the day. The Shanghai Composite Index declined 0.3% to 2,836.80.
Elsewhere
Elsewhere in Asia, the Nikkei 225 in Tokyo recovered from early losses to gain 0.7%, closing at 21,419.23. The Kospi in Seoul edged less than 0.1% higher to 2,031.20 and Australia’s S&P-ASX 200 was off less than 0.1% at 5,775.00.
India’s Sensex rose 2.8% to 31,455.60 and New Zealand gained 1.2%.
The FTSE 100 in London rose 1.4% to 6,152 and Frankfurt's DAX added 1.9% to 11,720. The CAC 40 in France gained 1.9% to 4,692.
In energy markets, benchmark U.S. crude lost 39 cents to $33.96 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.10 on Tuesday to settle at $34.35. Brent crude, used to price international oils, declined 54 cents to $36.20 per barrel in London. It rose 64 cents the previous session to $36.17.
The dollar gained to 107.79 yen from Tuesday’s 107.54. The euro retreated to $1.1017 from $1.0993.
— Compiled and edited by ArLuther Lee for The Atlanta Journal-Constitution.
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