New York:
Stocks are climbing on Wall Street in midday Monday trading, clawing back more than a third of their losses from last week. The S&P 500 was up 1 per cent, driving decisively higher after a much healthier-than-expected report on the housing market shook the market from its wobbly start. European stocks had similar fluctuations before pushing higher, while many Asian markets finished with losses. Treasury yields were holding relatively steady.
The Dow Jones Industrial Average was up 368 points, or 1.5 per cent, at 25,383, as of noon Eastern time, while the Nasdaq composite was up 0.8 per cent. Gains for Boeing and Apple in particular helped to lift Wall Street indexes. Boeing jumped 6 per cent as its troubled 737 Max jet looks set to begin test flights soon, while Apple added 1.8 per cent as customers keep buying its products regardless of whether they’re quarantined.
Stocks of smaller companies also jumped more than the rest of the market, which often happens when investors are feeling more optimistic about the economy. The Russell 2000 index of small-cap stocks was up 2.8 per cent to recover nearly all of its loss from last week. They’re the latest choppy moves for markets around the world, which have been swinging back and forth in recent weeks. A rise in infections of the new coronavirus, including in the US South and West, has dented the optimism that earlier sent the S&P 500 screaming nearly all the way back to the record it reached in February.
The worry is that the worsening levels could choke off the budding improvements the economy has shown recently as states and other governments ease up on lockdown orders, even with the Federal Reserve and other central banks pumping unprecedented amounts of aid into the economy. “Conflicting signals between the COVID-19 spread and economic data continue to keep risk sentiment, and consequently markets, in a gridlock going into the end of June,” said Jingyi Pan of IG.
Florida and Texas put new restrictions on bars to slow the spread of the virus, for example, which helped drive the S&P 500 to a loss of 2.9 per cent last week. Other government around the world are likewise backtracking on efforts to reopen their economies following widespread lockdowns that sent the global economy into a sudden, severe recession. To see how sharply the economy is swinging, consider Monday’s report on the housing market. It showed that the number of Americans signing contracts to buy homes rose a record 44.3 per cent in May from a month earlier.
