The three major averages on Wall Street have notched their fourth gain in five sessions as investors again bet on a swift economic recovery from coronavirus-driven lockdowns and the potential for more stimulus measures from the Federal Reserve.
The S&P 500 stands at a two-month high and was briefly above its 100-day moving average, a closely watched technical indicator that has acted as a resistance level.
The Nasdaq finished at its highest close in three months and was less than 5.0 per cent below record levels, as shares of Facebook Inc and Amazon.com Inc surged to all-time highs.
Gains were broad-based. The small-cap Russell 2000 index, which usually leads gains out of a recession, outperformed the large-cap indexes.
Minutes from the Federal Reserve’s most recent policy meeting showed the central bank pledged to act as appropriate to support the economy until it is on track to recovery, a sentiment that Fed Chair Jerome Powell has voiced in recent days.
“We have way lower interest rates for the foreseeable future, so that affects the multiple that we have to buy discounted stocks at,” said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.
“And if you give yourself a little bit more time, is it crazy to think everything is going to come back in two years and you are going to hold it three to five years?”
Still, with economic data likely to be dismal in the coming weeks, there is concern that stocks may have gotten ahead of themselves, with the S&P up nearly 33 per cent from its March 23 closing low.
The Dow Jones Industrial Average rose 1.52 per cent to end at 24,575.9 points, while the S&P 500 gained 1.67 per cent, to 2,971.61. The Nasdaq Composite climbed 2.08 per cent to 9,375.78.
Lawmakers in the US House of Representatives plan to vote next week on giving small businesses more time to utilise their coronavirus aid under the Paycheck Protection Program, House Speaker Nancy Pelosi said on Wednesday.
As states across the country begin to loosen restrictions, hopes for an economic rebound have grown. The NYSE Arca airlines index jumped as Delta Air Lines Inc’s chief executive officer said he was confident travel will return in the next 12 to 18 months.
Target Corp shares declined after the big box retailer reported a 64 per cent plunge in quarterly profit, as costs related to the coronavirus outbreak outweighed a surge in online sales.