Stocks marched broadly higher on Wall Street Wednesday, briefly nudging the S&P 500 above its
all-time closing high set in February, before the coronavirus pandemic led to a historic market plunge.
The benchmark index notched a 1.4% gain, its eighth in nine days. It ended within 0.2% of its record high
from Feb. 19, before the coronavirus prompted the sudden shutdown of much of the economy.
Big technology stocks led the way higher once again. Health care and communication services stocks also
had a strong showing. The rally followed gains for stocks across Europe and much of Asia, while Treasury
yields continued their sharp increase after a report on inflation came in higher than expected for the
second straight day.
The S&P 500 rose 46.66 points to 3,380.35. The Dow Jones Industrial Average gained 289.93 points,
or 1%, to 27,976.84. The Nasdaq composite, which is heavily weighted with technology stocks, climbed
229.42 points, or 2.1%, to 11,012.24. The Russell 2000 index of small company stocks picked up 8.15
points, or 0.5%, to 1,583.25.
Indexes in Europe closed broadly higher. Asian markets were mixed.
The U.S. stock market is on the edge of erasing the last of the losses taken after the coronavirus
pandemic crushed the economy into recession, even though the economy is still hobbling despite some
recent improvements. In March, the S&P 500 had been down nearly 34% from its record.
Much of the rebound has been due to massive amounts of support from the Federal Reserve, which has
slashed interest rates to nearly zero and propped up far-ranging corners of the bond market to keep the
economy’s head above water. The ultra-low interest rates mean investors are getting paid very little to
own bonds, which pushes some into stocks, boosting their prices.
Congress has also offered unprecedented amounts of aid, though it’s hit a seeming impasse in negotiations
to re-up its assistance.
All that support has investors willing to look a few months or a year into the future, when a vaccine for
the new coronavirus will hopefully be available and helping the economy get back to normal. More
importantly for stock prices, the expectation is that corporate profits will also rebound from their
current coronavirus-caused hole.
"Economic data is coming in much better than expected; the earnings season is much better than
expected," said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors.
"You couple all of those things with the massive amounts of fiscal and monetary stimulus taking
place. That’s why we’ve seen the (market) rally so quickly off its low and at the magnitude that we’ve
Wall Street’s gains on Wednesday were widespread, with two-thirds of the stocks in the S&P 500
Technology stocks were among the biggest forces prodding the market higher. It’s a return to form for
them, following a mini-stumble in recent days.
Big tech-oriented giants like Apple, Microsoft and Amazon have been the year’s biggest winners, carrying
the stock market through the pandemic despite the worries about the economy, on expectations they’ll
continue to deliver strong growth regardless of whether people are quarantined.
Tesla jumped another 13.1% Wednesday after announcing a 5-for-1 split of its stock, in hopes of making
the price of each share more affordable to investors. The stock has surged past $1,400 after starting
the year a little below $420.
The yield on the 10-year Treasury rose to 0.67% from 0.66% late Tuesday. It’s jumped sharply since
sitting at 0.57% late Monday.
A report on Wednesday showed that inflation remains very low, but it ticked up more last month than
economists expected. Economists debated how much value the report has, given that inflation is likely to
remain weak with the pandemic flattening the economy.
If inflation were to reappear, it could weaken the Federal Reserve’s commitment to keeping interest rates
low and could ultimately draw some investors away from stocks.
Other risks also continue to loom over the market, including worsening tensions between the United States
and China, which are the world’s largest economies. Technology companies have been in focus in
particular, and worries about potential retaliation by China were a big reason for U.S. tech stocks’
struggles earlier in the week.
Partisan rancor in Washington is also threatening the possibility of more assistance for the economy. A
$600 weekly unemployment benefit from the U.S. government expired at the end of July, and investors say
the economy needs another big lifeline from Washington. President Donald Trump signed several executive
orders this past weekend to offer some assistance, but critics say they fall well short of what’s
The recent rise in yields has also slowed the supersonic ascent for gold recently. The metal’s price has
shot to record highs this year, benefiting from increased demand by investors looking for safety amid
the pandemic but not interested in the low yields offered by bonds.
Gold for December delivery rose $2.70 to $1,949.00 an ounce a day after plunging by more than $90 an
Oil prices rose. Benchmark U.S. crude oil for September delivery rose $1.06 to settle at $42.67 a barrel
Wednesday. Brent crude oil for October delivery rose 93 cents to $45.43 a barrel.
AP Business Writer Elaine Kurtenbach contributed.