Stocks notch gains after selloff despite jump in virus cases
Stocks finished higher Wednesday following a sharp selloff a day earlier, as investors weighed the prospects of an economic recovery even as the U.S. posted a record daily spike in coronavirus cases.
The Dow Jones industrial average climbed 177.10 points to 26,067.28, after shedding nearly 400 points a day earlier amid a surge in outbreaks. The Standard & Poor’s 500 rose 0.8% to 3,169.94, posting gains in six of the past seven trading days.
The technology-heavy Nasdaq Composite jumped 1.4% to10,492.50, closing at another record. Shares of big tech companies propelled the index higher, with Apple jumping 2.3% to hit an all-time high. Amazon and Microsoft shares rose 2.7% and 2.2%, respectively.
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Optimism that the U.S. economy is on the mend as businesses reopen has helped drive stocks higher. But the recent surge in new virus cases has clouded hopes for a relatively quick economic turnaround. Investors are also girding for what the next few weeks will reveal about the health of corporate America as companies begin reporting their second-quarter results.
The U.S. reported more than 60,000 new virus cases Tuesday, a record for new cases reported in a single day, according to data compiled by Johns Hopkins University. The U.S. surpassed 3 million confirmed cases and more than 131,000 deaths. Globally, there have been almost 12 million cases and more than 545,000 deaths.
The rise in new cases could be due to a backlog of reporting from the July 4 holiday weekend, analysts said. Still, seven-day average deaths hit new highs in Arizona, Florida and Texas, and the trends are rising, according to Ian Shepherdson, chief economist of Pantheon Macroeconomics.
“The rate of hospitalizations and deaths per case is falling as the age of infected people falls and treatment improves, but if enough people fall ill, hospitals still can be overwhelmed—this is the constraint on policymakers—and more people will die,” Shepherdson said in a note.
Unprecedented amounts of aid from central banks and governments around the world are helping to prop up markets. But the worsening infection levels across much of the U.S. are countering that support.
Given the current murky outlook, investors are likely to cash in on recent gains, analysts said.
Treasury yields ticked higher. The yield on the 10-year Treasury rose to 0.65% from 0.64%. It tends to move with investors’ expectations for the economy and inflation.
Benchmark U.S. crude was up 0.7% at $40.91 per barrel. Brent crude, the international standard, gained 0.5% to $43.30 per barrel.
Gold added 0.6% to $1,820.90 per ounce. Its price tends to rise with worries about the economy and inflation, and it has climbed more than $300 since mid-March. Its rise, alongside the stock market’s rally, highlights for critics the disconnect between Wall Street and the economy.
In Europe, France’s CAC 40 fell 1.2%, while Germany’s DAX lost 1%. Britain’s FTSE 100 lost 0.6%.
Japan’s benchmark Nikkei 225 dropped 0.8%. Australia’s S&P/ASX 200 dipped 1.5%. South Korea’s Kospi shed 0.2%. Hong Kong’s Hang Seng rose 0.6%, while the Shanghai Composite bounced higher, adding 1.7%.
Contributing: The Associated Press
This article originally appeared on USA TODAY: Dow: Stocks notch gains after selloff despite jump in virus cases
