S&P 500 Flirts With Record Levels
By Joe Wallace and Sam Goldfarb
U.S. stocks rose Tuesday, extending a recent run of gains that
has pushed the S&P 500 near its first record close since
The broad stock market index climbed 0.6% after advancing for
the seventh consecutive session Monday, its longest winning streak
in more than a year. The index is within 1% of its record close set
The Dow Jones Industrial Average added about 303 points, or
1.1%, while the technology-heavy Nasdaq Composite Index edged down
less than 0.1%.
Shares of companies that are particularly sensitive to the
direction of the U.S. economy -- such as banks, energy firms,
cruise operators and airlines -- helped pull indexes higher, a sign
that a decline in new confirmed U.S. coronavirus cases and some
better-than-expected economic data has helped bolster investors'
Investors, meanwhile, sold assets viewed as havens.
The yield on the benchmark 10-year U.S. Treasury note rose to
0.646%, according to Tradeweb, from 0.573% Monday, on track for its
biggest increase since June. Yields rise when bond prices fall. The
price of gold fell 4.7% to $1,944.00 a troy ounce.
Shares of some fast-growing technology companies like Amazon.com
and Netflix continued to lag, a reversal of what has been a hugely
popular trade in recent months fueled by a belief that those
companies are relatively shielded from the pandemic's economic
"It's a very healthy sign that the market has broadened out and
we're not just being led by a handful of stocks," said Bruce
Bittles, chief investment strategist at Baird Co.
There is, he added, a "growing confidence that the economy is
healing maybe a little faster than it was a few months ago and the
second wave of the virus didn't do as much harm as was previously
Investor sentiment was further boosted by signs that President
Trump and Democrats are open to restarting negotiations on a broad
economic relief package. Administration officials and Democratic
leaders urged each other to return to the negotiating table after
Mr. Trump issued executive actions on jobless aid and other relief
over the weekend.
"The U.S. fiscal stimulus is absolutely critical to keeping
market momentum positive," said Nicholas Brooks, head of economic
and investment research at Intermediate Capital Group. "Markets are
assuming that ultimately Congress will come through with a package,
and that there's a lot of brinkmanship going on."
Mr. Trump also said late Monday that he was "very seriously"
considering a cut to capital-gains tax and paring taxes for
A recent surge in coronavirus cases continued to show signs of
abating. The U.S. reported fewer than 50,000 new cases for the
second day in a row Monday, pushing the total number close to 5.1
million, according to Johns Hopkins University.
However, investors are concerned by a pickup in infections in
parts of Europe that had appeared to bring the virus under
"It's hard for markets to digest the conflicting newsflow" on
the virus in different regions, said Hugh Gimber, global market
strategist at J.P. Morgan Asset Management. One positive for the
world economy is that local lockdown measures "have had a less
striking impact on mobility and spending data than the much more
stringent lockdowns earlier in the year, " he said.
Among gainers, Norwegian Cruise Line climbed 7.5%, while
JPMorgan Chase advanced 5.2%.
Earnings season for the largest U.S. companies is in its final
innings. Shares in International Flavors & Fragrances fell 2.9%
after the company reported a 40% drop in operating profits in the
second quarter from a year before. Of the 91% of companies on the
S&P 500 that had reported by Monday, 82% had beaten analysts'
profit forecasts, according to FactSet.
Overseas, the Stoxx Europe 600 jumped 1.7%. Hong Kong's Hang
Seng Index snapped three days of losses to rise 2.1%. The increase
was driven partly by a rally in shares of Macau casino stocks,
which jumped after the semiautonomous territory's government eased
quarantine requirements for visitors from mainland China.
Elsewhere, Japan's Nikkei 225 gained 1.9%, while the Shanghai
Composite Index lost 1.2%.
--Frances Yoon and Xie Yu contributed to this article.
Write to Joe Wallace at Joe.Wallace@wsj.com and Sam Goldfarb at
(END) Dow Jones Newswires
August 11, 2020 13:56 ET (17:56 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.