USA stocks end up Tuesday; indices report robust quarterly gains

Marco Green
July 4, 2020

Wall Street stocks rallied for a third straight session on Wednesday, after the ADP National Employment Report showed the nonfarm private sector created 2.4 million jobs in June, with 70% of new jobs in the leisure, hospitality, trade and construction industries. The Dow Jones Industrial Average once surged 493 points before closing with a gain of 92 points (+0.36%) at 25827. Dow futures dropped about 220 points, or 0.9%.

Futures tied to the S&P 500 rose 1.3%, suggesting stocks could rise after the NY opening bell.

"With the spikes (in new COVID-19 cases) we've seen the larger states - Texas, California and Florida - those states have taken steps to turn back their re-opening plans", Nolte added. That has dimmed some of the optimism for a relatively quick economic turnaround, especially for travel-related sectors like cruise lines.

"The strong rebound would normally be an unambiguously positive sign that a recovery is under way (but) it is being accompanied by a sharp rise in new infections, which was what caused the collapse in the first place", said Mike Bell, global market strategist at JP Morgan Asset Management in London.

The S&P rose 14.15 points to 3,130.01.

The pan-continental Stoxx Europe 600 gained 1.2%, while most major Asian equity benchmarks ended the day higher.

Massive rehiring sent the unemployment rate down to 11.1 per cent.

The pandemic has made collecting data on the economy unusually hard, which leaves economists uncertain about the numbers' accuracy.

Signs of the USA economy's revival have bolstered optimism among some investors that the damage caused by the coronavirus pandemic could be quickly erased.

Such hopes have lifted the S&P to within roughly 8% of the record set in February, after a drop of almost 34% when recession worries peaked. "Aggressive fiscal and monetary stimulus is going to continue and that's going to support the market, and recent economic data suggests a recovery is starting to emerge".

"And that will slow the overall growth and consumer spending in those regions".

On Thursday, Florida reported a record-shattering 10,000 new cases of the disease, worse than any European country reported at the peak of their outbreaks. It underlined how fragile the recovery is, and the bond market showed more caution than stocks as Treasury yields ticked lower.

Still, even with May and June's consecutive record payroll gains, the labour market has still recovered only a fraction of the 22 million jobs lost in the March-April plunge. Such concerns have held the market in check since early June following a months-long rocket ride.

USA markets will be closed Friday in observance of the Fourth of July holiday.

Other reports by Click Lancashire

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