Dow soars 553 points on mounting optimism around a strong economic recovery
by Carmen Reinicke, Business Insider US
- US stocks rose on Wednesday as investors were encouraged by signs that global authorities were taking measures to boost economies.
- The European Commission proposed an $826 billion stimulus package intended to aid recovery from the coronavirus-induced recession.
- A midday swoon was alleviated when chipmaker Micron issued a quarterly sales forecast that beat Wall Street estimates, spurring a rally in semiconductor stocks and pulling the tech-heavy Nasdaq out of negative territory.
- Oil slipped after an IEA report forecast a record drop in global energy investment this year.
- Read more on Business Insider.
US stocks rose on Wednesday as investors were encouraged by signs that international authorities were taking measures to boost the global economy.
The European Commission on Wednesday proposed an $826 billion stimulus package intended to aid recovery from the coronavirus-induced recession. If enacted, it would be the largest stimulus package in European history.
All three major indexes swooned in midday trading before rebounding after chipmaker Micron issued a quarterly sales forecast that beat Wall Street estimates. That spurred a rally in semiconductor stocks and lifted the tech-heavy Nasdaq Composite index out of negative territory.
Here’s where US indexes stood at the 4 p.m. ET market close on Wednesday:
- S&P 500: 3,036.13, up 1.5%
- Dow Jones industrial average: 25,548.27, up 2.2% (553 points)
- Nasdaq composite: 9,412.36, up 0.8%
Economic-stimulus efforts also took shape in overnight US trading. the Trump administration is weighing proposals that would give cash incentives to people returning to work, the White House economic adviser Larry Kudlow said during a Tuesday interview with Fox News.
Bank stocks gained as investors looked to the economy reopening. As of Memorial Day weekend, all 50 US states have relaxed at least some restrictions put in place mid-March to contain the spread of Covid-19. JPMorgan and Goldman Sachs both gained more than 5%, while American Express and Citigroup jumped more than 7%.
Stocks that have been roiled by the coronavirus market rout gained. Airline stocks increased, with United, American, and Delta leading the way higher. Cruise lines also climbed, with Norwegian and Royal Caribbean among the biggest gainers.
Still, it will take time for economic pain from coronavirus-induced shutdowns to abate. In just nine weeks, nearly 39 million Americans have filed for unemployment insurance benefits, and economists expect that another 2.1 million filed last week.
Oil prices slipped, with West Texas Intermediate crude falling as much as 6.3%, to $32.18 per barrel. The International Energy Agency forecast in a Wednesday report that the coronavirus pandemic would spark the largest decline in global energy investment. Brent crude dipped 5.3%, to $34.26 per barrel, at intraday lows.