(Reuters) – U.S. stocks rose above the 3,000 level for the first time since March 5 on Tuesday, continuing a rally that has pushed the benchmark index up nearly 35% from its March 23 closing low on hopes for a potential coronavirus vaccine and the reopening of businesses across the country.
Traders with masks work on the first day of in-person trading since the closure during the outbreak of the coronavirus disease (COVID-19) on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 26, 2020. REUTERS/Brendan McDermid
MARKET REACTION:
STOCKS: Dow up 2.38%, S&P 500 up 1.90%, Nasdaq up 1.48%
BONDS: Benchmark 10-year notes US10YT=RR last fell 12/32 in price to yield 0.6981%, from 0.659% late on Friday.
FOREX: The dollar index =USD fell 0.654%, with the euro EUR= up 0.69% to $1.0974.
COMMENTS:
JASON BENOWITZ, SENIOR PORTFOLIO MANAGER, THE ROOSEVELT INVESTMENT GROUP INC, NEW YORK
“In my view, the major driver of positive investor sentiment is the reopening of the U.S. and global economy. Reports of economic activity, while still terrible compared to three months ago, have begun to get less bad as compared to the prior month. This suggests the economy has bottomed and may be starting to rebound off its lows.
“A second factor is progress in therapeutic interventions including vaccines. Investors anticipate that a widely available and effective vaccine would dramatically improve economic conditions. The news that Novavax is beginning human trails for its vaccine candidate adds to a growing list of therapies entering the clinic, increasing investor hopes that one or more will make it to the finish line and ameliorate the public health crisis, and with it, the economic crisis.
“Some investors believe that the stock market is getting ahead of itself. Economic conditions are certainly worse than the last time the S&P 500 index advanced to 3,000, with the unemployment rate over ten percentage points higher, for example. However, stock prices are forward looking and discount the potential for futur