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Stocks extend gains on Wall Street to a 3rd straight day

UPDATED: Tue., June 2, 2020

In this image from video made available by NASA, astronaut Chris Cassidy, right, rings the opening bell of the Nasdaq Stock Exchange accompanied by fellow astronauts Robert L. Behnken, left, and Doug Hurley in the International Space Station on Tuesday, June 2, 2020. (AP)
In this image from video made available by NASA, astronaut Chris Cassidy, right, rings the opening bell of the Nasdaq Stock Exchange accompanied by fellow astronauts Robert L. Behnken, left, and Doug Hurley in the International Space Station on Tuesday, June 2, 2020. (AP)
By Alex Veiga Associated Press

Stocks closed broadly higher on Wall Street Tuesday, extending the market’s winning streak to a third day.

The latest gains, which followed a rally in global stocks, were driven by optimism that the global economy will begin to recover as governments gradually allow businesses that were closed because of the coronavirus outbreak to reopen.

The S&P 500 closed 0.8% higher after spending much of the morning wavering. Technology, industrial and health care sector stocks accounted for a big slice of the gains. Energy stocks far outpaced the rest of the market as the price of crude oil rose again. Bond yields rose, another sign of ebbing pessimism among investors.

So far, Wall Street’s momentum has not been derailed by the wave of daily unrest across the U.S. that began last week in Minneapolis as a protest over police brutality. Cities across the country have been rocked by violence and destruction for seven days in a row, drawing threats from the White House to send troops in to put down the unrest.

“The market action seems to have a lot more to do with people’s confidence about the economic reopening,” said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management. “It’s happening irrespective to what we’re seeing socially across the country right now.”

The S&P 500 gained 25.09 points to 3,080.82. The Dow Jones Industrial Average rose 267.63 points, or 1.1%, to 25,742.65. The Nasdaq composite, which is heavily weighted with technology companies, added 56.33 points, or 0.6%, to 9,608.37. The index had been down 0.8% in the early going.

Smaller company stocks had some of the biggest gains. The Russell 2000 index picked up 12.84 points, or 0.9%, to 1,418.21.

NASA astronauts launched into space by SpaceX on Saturday rang the opening bell from the International Space Station early Tuesday to kick off trading on the Nasdaq.

Stocks have now recouped most of their losses after the initial economic fallout from the coronavirus knocked the market into a staggering 34% skid in February and March. The S&P 500 is now down 9% from its all-time high in February.

Investors are hoping that the worst of the recession has already passed, or will soon, as governments around the country and around the world slowly lift the restrictions that left broad swaths of the U.S. economy at a standstill beginning in March.

In Europe, France’s CAC 40 jumped 2% Tuesday as the country opened restaurants, cafes, parks and beaches and launched a contract tracing app to help keep tabs on new contagions. Germany’s DAX, which had been closed Monday, caught up with previous global markets’ gains and surged 3.7%. Britain’s FTSE 100 added 0.9%. Markets in Asia closed broadly higher.

While more countries and sectors are reopening, economic activity is expected to remain subdued as social distancing rules complicate plans to get back to business. Meanwhile, investors continue to keep an eye out for any signs that the reopening of the economy is leading to a resurgence in COVID-19 cases. Tokyo had 34 new confirmed cases Tuesday. The daily numbers had dropped below 20 recently.

Even so, Wall Street is betting that the U.S. government and others will not move to close the economy again even if there is a pickup in new cases.

“There’s just a lack of appetite for a potential re-shutdown in the event that the virus accelerates from here,” Hainlin said.

Bond yields were mostly higher. The yield on the 10-year Treasury rose to 0.68% from 0.66% late Monday.

Oil prices rose. Benchmark U.S. crude oil for July delivery rose $1.37 to settle at $36.81 a barrel Tuesday. Brent crude oil for August delivery rose $1.25 to $39.57 a barrel.

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