By Stan Choe
Stocks are rising again on Wall Street Wednesday, and the S&P 500 is climbing toward its seventh gain in the last nine days.
The S&P 500 was up 0.7% after the first 10 minutes of trading, with travel companies, banks, and other stocks that would benefit the most from a reopening economy leading the way. It followed up on even stronger gains in Europe, where authorities proposed a 750 billion euro ($825 billion) recovery fund to help carry the region through the recession caused by the response to the coronavirus pandemic.
Asian stocks were mixed, though, as tensions between the United States and China over the independence of Hong Kong weighed on markets there.
The Dow Jones Industrial Average was up 308 points, or 1.2%, at 25,303, as of 9:40 a.m. Eastern time. The Nasdaq was down 0.3%.
The S&P 500 is back to where it was in early March, at the start of its spring sell-off on worries about the coming steep recession. It’s now down less than 10% from its record set in February after earlier being down nearly 34%.
Massive aid from the Federal Reserve helped start the rally in late March, which has built more recently on hopes that economic growth can return later this year as governments slowly relax stay-at-home restrictions. In recent weeks, stocks whose profits are most closely tied to the strength of the economy have been showing more life.
Hopes for potential COVID-19 vaccines under development have also helped propel stocks.
American Airlines Group jumped 9.8% for one of the strongest gains in the S&P 500, as airlines helped lead the way on hopes that people will begin traveling again for leisure and for work. Alaska Air Group and United Airlines both rose at least 8%.
Other travel-related stocks were also strong on hopes that the economy and life, in general, can get closer to “normal,” if not all the way back to where they were before the pandemic. Cruise operators were some of the hardest-hit stocks earlier in the sell-off, and Royal Caribbean Cruises and Norwegian Cruise Line both rose at least 8.5%.
Banks were also stronger in hopes that business reopenings could limit the wave of loan defaults investors had been worrying about. Financial stocks in the S&P 500 rose 4.1% for the largest gain among the 11 sectors that make up the index.
JPMorgan Chase rose 5.4%, Bank of America gained 5% and Citigroup jumped 5.8%.
In Europe, Germany’s DAX returned 1.7, and France’s CAC 40 rose 2.1% after the announcement of the region’s recovery fund. The president of the European Commission called it “an ambitious answer,” though it still needs to be endorsed by every country in the European Union. About two thirds of the fund would take the form of grants, while the rest would be loans.
In Asia, Japan’s Nikkei 225 rose 0.7%, but other markets were weaker. The Hang Seng in Hong Kong slipped 0.4%, and stocks in Shanghai lost 0.3%. U.S. officials have been critical of China’s response to the coronavirus outbreak, and the latest front in increased tensions between the two centers on China’s control over Hong Kong.
In the bond market, the yield on the 10-year Treasury note held steady at 0.69%.
U.S. crude oil for delivery in July fell 2% to $33.67 per barrel. Brent crude, the international standard, slipped 2% to $36.02 per barrel.