By Chuck Mikolajczak
NEW YORK (Reuters) – The three major averages on Wall St were poised for their fourth gain in five session on Wednesday as investors again bet on a swift economic recovery from coronavirus-driven lockdowns and the potential for more stimulus measures from the Federal Reserve.
The S&P 500 stands at a two-month high and was briefly above its 100-day moving average, a closely watched technical indicator that has acted as a resistance level. The Nasdaq <.IXIC> was trading at its highest level in three months and was about 5% below record levels, as shares of Facebook Inc <FB.O> and Amazon.com Inc <AMZN.O> surged to all-time highs.
Gains were broad-based, with each of the 11 major S&P sectors on the plus side. The small-cap Russell 2000 index <.RUT>, which usually leads gains out of a recession, outperformed the large-cap indexes.
Still, with economic data likely to be dismal in the coming weeks, there is concern that stocks may have gotten ahead of themselves, with the S&P up nearly 33% from its March 23 closing low.
“Once the economy shut down, we had very little clarity with respect to numbers and measurements, the whole marketplace is sort of flying blind,” said Mike Zigmont, head of trading at Harvest Volatility Management in New York. “This market is swept up in a very powerful trend and along the way it is very confident in itself. There hasn’t been much doubt that we are over our skis.”
Minutes from the Federal Reserve’s most recent policy meeting showed the central bank pledged to act as appropriate to support the economy until it is on track to recovery, a sentiment that Fed Chair Jerome Powell has voiced in recent days.
The Dow Jones Industrial Average <.DJI> rose 360.8 points, or 1.49%, to 24,567.66, the S&P 500 <.SPX> gained 47.95 points, or 1.64%, to 2,970.89, and the Nasdaq Composite <.IXIC> added 174.88 points, or 1.9%, to 9,359.99.
Lawmakers in the U.S. House of Representatives plan to vote again next week on giving small businesses more time to utilize their coronavirus aid under the Paycheck Protection Program, House Speaker Nancy Pelosi said on Wednesday.
As states across the country begin to loosen restrictions, hopes for an economic rebound have grown. The NYSE Arca airlines index <.XAL> jumped 5.35% as Delta Air Lines Inc’s <DAL.N> chief executive officer said he was confident travel will return in the next 12 to 18 months.
Target Corp <TGT.N> lost 2.86% after the big box retailer reported a 64% plunge in quarterly profit, as costs related to the coronavirus outbreak outweighed a surge in online sales.
Advancing issues outnumbered declining ones on the NYSE by a 4.05-to-1 ratio; on Nasdaq, a 3.53-to-1 ratio favored advancers.
The S&P 500 posted 13 new 52-week highs and no new lows; the Nasdaq Composite recorded 74 new highs and nine new lows.
(Reporting by Chuck Mikolajczak in New York; Additional reporting by Ambar Warrick and Medha Singh in Bengaluru; Editing by Leslie Adler)