Wall Street posted gains on Tuesday as market participants looked past widespread social unrest and pandemic worries to focus instead on easing lockdown restrictions and signs of economic recovery. It was a similar story in Canada, where the S&P/TSX Composite Index climbed 0.88%, lifted by strong gains in financials and energy stocks.
Tech shares, along with cyclical stocks like industrials and financials, gave the biggest lift to all three major stock indexes in the U.S.
The Nasdaq, the S&P 500 and the Dow have been approaching their all-time closing highs in recent weeks and are now about 2%, 9% and 13%, respectively, below record closing levels.
“Technicals are pushing the market higher and the market’s not paying attention to the potential problems that the protests could have on local economies,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
Nationwide, violent protests over the death of a black man at the hands of law enforcement officers continued unabated, even as President Donald Trump vowed to unleash the military on the demonstrators.
“If the violence continues it might worsen the coronavirus’ impact on businesses,” Cardillo added. “A lot of stores would close; there’d be curfews; people wouldn’t be able to shop and that would further hurt the economy.”
But the green shoots of economic rebound driven in no small part by massive stimulus packages from Capitol Hill and the U.S. Federal Reserve has helped fuel investor optimism.
Market participants now await Friday’s crucial jobs report from the Labor Department for a clearer picture of the extent of economic damage wrought by mandated lockdowns. The report is expected to show the unemployment rate surging to a historic 19.7%.
Unofficially, the Dow Jones Industrial Average rose 1.05% to end at 25,742.17 points, while the S&P 500 gained 0.82% to 3,080.79. The Nasdaq Composite climbed 0.59% to 9,608.59.
The TSX gained 134.60 points to 15,370.81. The energy index jumped 4.50%, as the price of crude oil climbed by more than US$1 a barrel on hopes that major crude producers will agree to extend output cuts during a video conference expected to be held this week and as countries and U.S. states begin to reopen after coronavirus lockdowns.
Brent crude settled at $39.57 a barrel, rising $1.25, or 3.3%. U.S. West Texas Intermediate crude (WTI) settled at $36.81 a barrel, jumping $1.37, or 3.9%. Both benchmarks neared three-week highs.
“There’s the anticipation that OPEC+ is going to agree to extend their current levels for another two months, and at the same time, the market anticipates that the reopening of economies around the world will increase demand and will get us in a position such that, by August, the oil market will be in balance,” said Andy Lipow, president of consultants Lipow Oil Associates.
The Organization of the Petroleum Exporting Countries and others including Russia, a grouping known as OPEC+, are considering extending their production cuts of 9.7 million barrels per day (bpd), or about 10% of global production, into July or August, at a meeting expected to be held on Thursday.
Under the original OPEC+ plan, the cuts were due to run through May and June, scaling back to a reduction of 7.7 million bpd from July to December.
The financial sector of the TSX gained 2.10% on Tuesday; materials had a rough session, falling 2.47%, as gold prices fell about 1%.
Read more: Stocks that saw action Tuesday - and why
Reuters, Globe staff
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