Technology companies powered broad gains for stocks on Wall Street in early trading Wednesday, as the market bounced back from a sudden drop a day earlier.
The S&P 500 was up 1.8%, more than it lost on Tuesday, when the index snapped a three-day winning streak. Bond yields held steady and crude oil prices headed higher.
Technology, the only sector that’s holding on to a gain for the year, accounted for much of the market’s upward move. Communication services companies and banks also helped drive the market higher. Markets in Europe and Asia also rose.
The Dow Jones Industrial Average gained 399 points, or 1.7%, to 24,605. The Nasdaq composite, which is heavily weighted with technology stocks, rose 1.9%. Small-company stocks notched strong gains, another bullish signal. The Russell 2000 index was up 2.6%.
Despite Tuesday’s stumble, Wall Street is on track to recoup its losses from last week amid fresh hopes for a U.S. economic recovery in the second half of the year and optimism about a potential vaccine for COVID-19. A strong rally on Monday reversed all of the market’s losses for the month. The index is still down about 13% from its all-time high in February, however.
Investors are betting that the economy and corporate profits will begin to recover from the coronavirus pandemic as the U.S. and countries around the world slowly open up again. However, concerns remain that the relaxing of stay-at-home mandates and the reopening of businesses could lead to another surge in infections, potentially ushering in another wave of shutdowns.
The market is getting some insight into how companies are navigating the economic fallout from the coronavirus this week as several retailers report quarterly results. Lowe’s rose 0.9% Wednesday after the home improvement chain reported quarterly results that topped Wall Street’s forecasts.
Target reported strong first-quarter online sales growth as the outbreak put millions in lockdown. Its results also beat analysts’ forecasts, though the company’s shares were down 0.8%.
Royal Caribbean said it booked a $1.4 billion first-quarter loss as the cruise line operator was forced to suspend operations due the pandemic. Still, its shares rose 1.4% after the company said its bookings for 2021 are within historical ranges.
Oil prices rose. Benchmark U.S. crude oil was up 4.1%, to $33.37 a barrel. Brent crude oil, the international standard, was up 4.6%, to $36.23 a barrel.
The price of oil has made a comeback this month as oil producing nations cut back on output and the gradual reopening of economies around the globe have driven up demand. Crude oil started the year at about $60 a barrel, but plummeted earlier this year as demand sank due to widespread travel and business shutdowns related to the coronavirus.
Bonds yields held steady. The yield on the 10-year Treasury note, a benchmark for interest rates on many consumer loans, was flat at 0.71%.
Global stock markets were subdued Wednesday as investors weighed hopes for a recovery as economies gradually reopen against worries over the havoc wreaked by the pandemic.
France’s CAC 40 rose less than 0.1%, while Germany’s DAX was up 0.5%. Britain’s FTSE 100 rose 0.5%. Markets closed mostly higher in Asia.
