Stocks soar as New York Stock Exchange reopens floor to traders

Stock roared Tuesday after the holiday weekend as the nationwide shutdown continues to unwind, more drug companies chase coronavirus vaccines and the New York Stock Exchange reopened its floor to traders for the first time in two months.

The Dow Jones industrial average closed the day up 530 points, about 2.2%, to push the blue-chip index to just shy of 25,000. The Standard & Poor’s 500 index jumped 36 points, about 1.2% while the tech-heavy Nasdaq added 15 points, or about 0.2%.

“With more signs of the worst of the virus being behind us, investors are beginning to focus on more countries reopening and the lifting of travel bans around the world,” Torsten Slok, chief economist for Deutsche Bank Securities said in an email. “More signs of reopening and more signs of travel bans being lifted creates more clarity for markets.”

President Donald Trump marked the advance on social media. “Market up BIG, DOW crosses 25,000. S&P 500 over 3000. States should open up ASAP. The Transition to Greatness has started, ahead of schedule. There will be ups and downs, but next year will be one of the best ever!” he said in a Twitter post.

Dow component Merck was up 2% Tuesday morning after the pharmaceutical giant announced several advances against the coronavirus, including teaming with another company to develop a vaccine as well as new treatments for virus patients.

All 11 S&P stock sectors advanced, led by financials and industrials, which had been unloved sectors whose comeback is a sign that the slow recovery is broadening.

“Laggards like banks and industrials are leading, a sign that investors want to be in the market but searching for value,” said David Donabedian, chief investment officer of CIBC Private Wealth Management, in an email.

Shares in consumer cyclical stocks were showing big gains, another sign that investors believe the economy is strengthening. Airline stocks were on a tear, with United up 17%, American 15%, and Southwest and Delta up 14%.

Nearly every one of the 30 Dow blue chips were up on the day, with Raytheon Technologies leading that pack at more than 8%. Goldman Sachs and JPMorgan Chase were up 7%. Industrials Boeing, Dow and Caterpillar were also surging at least 5% around midday.

Merck joins several companies racing to develop a vaccine to stop a disease that has claimed nearly 100,000 American lives.

Investors got other morsels of good news. The Commerce Department reported new-home sales climbed 0.6% in April, an unexpected increase as economists had forecast a 22% drop.

The Conference Board said its consumer confidence index improved to 86.6 this month, from 85.7 in April. Economists had expected better, but the numbers bolster sentiment after weeks of dour economic data.

Maryland-based Novavax reported that it entered human study for a coronavirus vaccine. Last week, Massachusetts-based Moderna announced that a small, early trial for its own candidate yielded positive results. Pfizer, Johnson & Johnson and others also are trying to develop a vaccine for use as early as this year.

“One of these is going to work,” Scott Gottlieb, former Food and Drug Administration commissioner, said Tuesday in an interview with CNBC.

Though the novel coronavirus continues to spread, with U.S. fatalities nearing 100,000, the United States is showing signs of revival even as jobless claims neared 40 million last week. The unemployment rate spiked to 14.7% in April, the worst level since the Great Depression. The government will release May data next week.

Trump economic adviser Kevin Hassett in a weekend interview with CNN predicted that unemployment numbers will get worse before they begin to trend downward.

Unemployment, said Hassett, “is going to be quite a bit higher.”

Airlines reported increased passenger traffic over the holiday weekend, though it is still a fraction compared with a year ago. Restaurants and hotels are seeing more bookings. As a result, airlines and cruise stocks have begun climbing out of dismal lows.

Oil prices extended their comeback, as supply and demand rebalance with more people driving and producers slowing output. U.S. benchmark West Texas Intermediate crude was selling for nearly $35 per barrel Tuesday, more than triple the price of a month ago. Brent crude was selling for around $37. Though prices remain well below what most producers need to earn a profit, oil experts are encouraged by the momentum.

The New York Stock Exchange reopened its floor Tuesday for the first time since March 23. Most traders will continue to work remotely, and those who return will come back to a “new normal,” according to NYSE President Stacey Cunningham.

“We’re essential workers. We took a pause voluntarily because we wanted to learn more about the virus and about how to protect ourselves from it,” Cunningham said Tuesday on NBC. “What’s really critical is that reopen does not mean go back to business as usual.”

Protective measures for returning traders will include temperature checks, masks and plexiglass barriers to ensure social distancing, Cunningham explained in a Wall Street Journal column. Workers will also be “required to avoid public transportation” to “limit their exposure and preserve capacity for others.”

“Stocks trade better when the floor is open, with reduced volatility and fairer prices,” Cunningham wrote. “Recent data demonstrate that our trading floor saves investors millions of dollars each day by making transactions more efficient.”