U.S. stocks jumped on Tuesday, pushing the Dow Jones Industrial Average to close near 25,000. Top White House economist Larry Kudlow said that consumer confidence and optimism over a CCP virus vaccine were among the factors that fueled the rally.
Unofficially, the blue-chip Dow rose over 530 points, or 2.2 percent, to 24,997.
The benchmark S&P 500 rose 1.2 percent to 2,992. It passed 3,000 on Tuesday afternoon for the first time since March 5 before dropping again.
The S&P 500 has risen about 34 percent from its March lows mostly because of central bank and government stimulus at a time when the U.S. economy is seeing its biggest job losses since the Great Depression of the 1930s. It is now about 12 percent below its February record high.
Kudlow told reporters on Tuesday that several factors were behind the market rally.
“Consumer confidence is improving, particularly the six months ahead,” said Kudlow. “All the curves are flattening and moving downward, mortality, and new cases. Second of all, a lot of talk about a speedy movement towards a vaccine, moving faster than these companies have ever done before. We’ve deregulated a lot to allow them to do that. We’re partnering with the private sector.”
Kudlow added that progress in reopening contributed to the spike.
“I think there’s grounds for optimism,” he said.
Data showed consumer confidence in the United States nudged upward in May, adding to hopes that the worst of the economic impact of the shutdown is in the past.
“There’s more optimism about the vaccines and all the 50 states have reopened to various degrees,” leading to optimism that the U.S. economy will improve, said John Praveen, portfolio manager at QMA, a PGIM company.
However, with macroeconomic data pointing at a deep recession, some analysts warned that financial markets could be betting on too fast a recovery.
“The impact on the economy and corporate earnings will be seen for several quarters, [and] I’m not sure if it has been completely baked into the equity prices,” Robert Wyrick, chief investment officer at Post Oak Private Wealth Advisors in Houston, told the Reuters Global Markets Forum.
The New York Stock Exchange on Tuesday partially reopened its trading floors at the iconic 11 Wall Street building, which has been closed since March 23.
The floor, known worldwide for an anarchic atmosphere with traders shouting orders over one another, has been closed since mid-March due to the outbreak caused by the CCP (Chinese Communist Party) virus, commonly known as the novel coronavirus.
Reuters and the Associated Press contributed to the report.
From The Epoch Times