· Dow jumps more than 500 points as Wall Street cheers record retail sales comeback
Stocks rose on Tuesday as a record jump in retail sales — coupled with positive trial results from a potential coronavirus treatment and hopes of more stimulus — sent market sentiment soaring.
The Dow Jones Industrial Average closed 526.82 points higher, or 2%, at 26,289.98. The S&P 500 gained 1.9% to end the day at 3,124.74 while the Nasdaq Composite climbed 1.8% to 9,895.87. It was the third straight gain for the major averages.
The U.S. government reported a record 17.7% increase in retail sales for May. Economists polled by Dow Jones expected a gain of 7.7%. President Donald Trump touted the strong data, adding it “looks like a BIG DAY FOR THE STOCK MARKET, AND JOBS!”
Meanwhile, trial results announced Tuesday showed dexamethasone — a widely available drug — can help critically ill coronavirus patients. The treatment reportedly reduced Covid-19 deaths in hospitalized patients by up to one third.
Sentiment was also lifted after Bloomberg News reported, citing people familiar with the plan, the Trump administration is drawing up a $1 trillion infrastructure proposal. The report said a preliminary version being prepared would set aside the majority of the money for traditional infrastructure projects such as roads and bridges, though funds would also be reserved for 5G wireless infrastructure and rural broadband.
· Dow futures fall 100 points after rally in the previous session
U.S. stock futures moved lower in overnight trading, following a big rally in the previous session fueled by growing belief that the worst may be over for the world’s largest economy.
Dow futures fell 130 points, indicating a loss of 0.5% at the open on Wednesday. The S&P 500 and Nasdaq-100 were also set to open lower, with losses of 0.4% and 0.25%, respectively.
· European markets close 3% higher on Fed’s stimulus and new coronavirus treatment
European stocks rallied Tuesday as investors reacted to the U.S. Federal Reserve’s latest announcement, while news of a new lifesaving coronavirus drug further boosted risk appetite.
The pan-European Stoxx 600 closed up by around 3%, with construction stocks soaring 4% to lead gains as all sectors and major bourses finished in positive territory.
Investors on Tuesday were focused on central bank announcements, particularly after the Fed announced Monday more measures to support the market.
· Asia stocks little changed as IMF warns of unprecedented crisis; regional geopolitical tensions watched
Stocks in Asia were little changed in Wednesday morning trade as the International Monetary Fund said the global economy is set to see a more significant contraction than it previously forecast.
In Japan, the Nikkei 225 shed 0.77% in early trade while the Topix index declined 0.4%. Japan’s exports plunged 28.3% year-on-year in May, according to provisional trade statistics released Wednesday by the country’s Ministry of Finance.
Over in South Korea, the Kospi hovered around the flatline.
Meanwhile, the S&P/ASX 200 in Australia added 0.3%
Overall, the MSCI Asia ex-Japan index traded 0.07% higher.
IMF Chief Economist Gita Gopinath said in a Tuesday blog post that “the forthcoming June World Economic Outlook Update is expected to show negative growth rates even worse than previously estimated.” The fund also said the current crisis, which it dubbed the Great Lockdown, is “unlike anything the world has seen before.”
Investors will likely also continue to watch for developments on the geopolitical front regionally, as tensions escalate along the Korean peninsula after North Korea reportedly destroyed a liaison office with the South. Over at the Himalayan border, Indian and Chinese troops clashed as the two sides remain in a standoff, according to a Reuters report.
Reference: CNBC, Reuters
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