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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowU.S. stocks climbed after better-than-estimated economic data overshadowed concern over an increase in coronavirus cases. Treasurys and the dollar advanced.
The S&P 500 index rose 1.5%, to close at 3,053. The Dow Jones industrial average jumped 580 points, or 2.3%, to close at 25,596. And the Nasdaq composite index rose 1.2%, to 9,874.
The S&P 500 erased its June decline after data showed U.S. pending home sales posted a record gain, exceeding all forecasts.
Boeing Co. led gains the Dow Jones industrial average after a 737 Max lifted off from a Seattle airfield with a U.S. Federal Aviation Administration pilot on board. The tech-heavy Nasdaq extended gains as Facebook Inc. wiped out its losses.
The unexpected improvement in economic data partly resulted from some states beginning to ease restrictions from coronavirus lockdowns.
There is some concern about the recovery in others. Florida reported a jump in its double-digit infection rate, New Jersey halted plans for indoor dining and New York City said it’s considering it.
Deaths from the virus surpassed 500,000 worldwide and confirmed cases exceeded 10 million as the World Health Organization warned that the worst is yet to come.
“There’s a lot of cash on the sidelines,” Tom Lee, co-founder and head of research at Fundstrat Global Advisors, told Bloomberg TV. “It’s not clear what trajectory coronavirus is heading. But I also think because we’re into quarter-end, there’s been some rebalancing. So I’m kind of in the camp that any weakness is short-lived. I would think July is going to be a strong month for stocks.”
U.S. companies are providing reason for hope that an earnings recession may be less severe than some analysts expect. The signal comes from a profit-outlook index, compiled by Bloomberg and based on corporate revisions to forecasts.
For almost all of June, the index’s 20-day moving average has exceeded 50, showing more companies raised projections than lowered them. The average peaked June 17 at 63.4, the highest reading in the index’s 20-year history. Analysts estimate that second-quarter earnings for the S&P 500 will plunge 44% after a first-quarter decline of 18%.
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