Wall Street climbs on recovery hopes, Nasdaq hits record high

White House economic adviser Lawrence Kudlow said tax rebates and direct mail checks are on the table in the next coronavirus relief bill.

Reuters

June 24, 2020 / 08:03 AM IST

Wall Street’s three major indexes rose on Tuesday as improving economic data and the prospect of more stimulus bolstered hopes of a swift recovery, while a jump in technology shares powered the Nasdaq to another record high.

White House economic adviser Lawrence Kudlow said tax rebates and direct mail checks are on the table in the next coronavirus relief bill.

The Nasdaq hit a fifth record high this month with Apple Inc providing the biggest boost. At least three brokerages raised their price targets for Apple’s stock, and UBS raised its iPhone shipment estimates a day after the iPhone maker said it would use its own chips for Mac computers.

Data showed that the pace of contraction in the U.S. manufacturing and services sectors slowed in June as businesses reopened after lockdowns that started in mid-March.

Also, new home sales jumped 16.6% in May, blowing past estimates of a 2.9% rise.

“People are feeling good about the economy, not concerned about rising coronavirus cases and not being overly concerned about the election. The beat goes on,” said Bob Doll senior portfolio manager, chief equity strategist at Nuveen.

At 2:15 p.m. ET, the Dow Jones Industrial Average rose 223.49 points, or 0.86%, to 26,248.45, the S&P 500 gained 29.14 points, or 0.93%, to 3,147 and the Nasdaq Composite added 135.30 points, or 1.35%, to 10,191.77.

Earlier global equity markets had shown some relief from U.S. President Donald Trump’s assurance that the Phase 1 trade agreement with China was “fully intact” after adviser Peter Navarro sparked confusion by saying the deal was over.

While U.S.-China tensions have been a cause for concern, monetary and fiscal support worth trillions of dollars has in part powered the benchmark S&P 500, with the index roughly 7% below its Feb. 19 record high.

Nine of the 11 major sub-indexes were higher with technology and consumer discretionary posting the steepest gains. The defensive real estate and utilities sectors slipped.

“If people are feeling more OK about the world, you don’t want to own the more defensive stocks. You want to own stocks that can benefit from an improving economy,” said Doll.

Nike Inc rose 2% as brokerages raised their price targets ahead of quarterly results on Thursday.

Boeing Co’s top supplier Spirit AeroSystems Holdings slipped 14% after it said it was seeking relief from lenders as its finances were stretched by the COVID-19 pandemic and a 737 MAX production halt. Boeing shares were down 1.9%.