US stocks have risen, with the S&P 500 closing above 3000 for the first time since March 5, as the further easing of lockdowns lifted optimism for an economic recovery.
Bank stocks powered the day’s advance, with the S&P 500 financial index leading gains among major sectors.
The index rose nearly 10 per cent over the past two sessions for its biggest two-day increase since April 8-9.
JPMorgan was the leading gainer in the financial index on Wednesday, rising 5.8 per cent as the stock surged for a second day in a row.
The bank’s chief executive Jamie Dimon said on Tuesday he expects JPMorgan will boost its credit reserves again in the second quarter, but said there are signs the economy is regaining its footing.
Continued easing of lockdowns, optimism about an eventual COVID-19 vaccine and massive US stimulus have been driving the market’s recent gains.
On Wednesday, Walt Disney announced plans to begin reopening its Walt Disney World resort in Florida, the world’s largest theme park, in phases beginning July 11.
MGM Resorts said it would reopen its four Las Vegas casinos on June 4.
Peter Cardillo, chief market economist at Spartan Capital Securities in New York, said it was “all about liquidity and the hopes that the economy will eventually do well”.
“The rally will continue, but I don’t think it will continue without pullbacks,” he said, noting that weak second-quarter earnings could give investors a “reality check”.
Tech-related shares underperformed the broader market on Wednesday after leading the recent rally.
The Dow Jones Industrial Average rose 553.16 points, or 2.21 per cent, to 25,548.27, the S&P 500 gained 44.36 points, or 1.48 per cent, to 3,036.13, and the Nasdaq Composite added 72.14 points, or 0.77 per cent, to 9,412.36.
Amid the recent gains, US tensions with China have cast a cloud on markets.
US President Donald Trump said on Tuesday that Washington would announce its response to China’s planned national security legislation on Hong Kong before the end of the week.
US Secretary of State Mike Pompeo said on Wednesday that Hong Kong no longer warrants special treatment under US law as it did when it was under British rule, potentially a big blow to its status as a major financial hub.
Tech-related shares are among the most sensitive to Chinese growth, said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute in St Louis.
“If the market is going to go higher from here, you’re going to have to have broader participation, but you are going to need those large-cap tech companies to be along for the ride because they make up such a large portion of the benchmark,” Samana said.
Also on Wednesday, the Federal Reserve’s Beige Book report showed that US businesses continued to be hammered by the effects of the novel coronavirus epidemic into the middle of May.
Advancing issues outnumbered declining ones on the NYSE by a 3.81-to-1 ratio; on Nasdaq, a 2.21-to-1 ratio favoured advancers.
The S&P 500 posted seven new 52-week highs and no new lows; the Nasdaq Composite recorded 41 new highs and 10 new lows.
Volume on US exchanges was 12.86 billion shares, compared to the 11.33 billion average for the full session over the last 20 trading days.