Wall Street has risen as early signs of a slowdown in coronavirus cases in US hot spots raised hopes that sweeping lockdown measures to contain the outbreak were working.
The S&P 500 was set for its biggest two-day gain in nearly two weeks on Tuesday, building on a 7.0 per cent jump on Monday, as the governors of New York, New Jersey and Louisiana pointed to tentative signs of a plateauing in the pandemic.
Early gains were led by the energy, financials and materials sectors, with an aggressive round of fiscal and monetary stimulus in the past month also boosting risk appetite.
Despite the strong start to the week, the S&P 500 remains about 19 per cent below its mid-February record high, as strict stay-at-home orders crushed demand across industries and sparked mass staff furloughs.
“This is looking more like a bear market rally,” said Nancy Perez, senior portfolio manager at Boston Private Wealth in Miami.
“I think there’s still a lot of headwinds that could cause this market to re-test the lows. There will be the initial resumption of business on paper, but then the actual actions will have to follow.”
In early trading, the Dow Jones Industrial Average was up 508.74 points, or 2.24 per cent, at 23,188.73, the S&P 500 was up 48.52 points, or 1.82 per cent, at 2,712.20 and the Nasdaq Composite was up 101.38 points, or 1.28 per cent, at 8,014.61.
Wall Street’s fear gauge has steadily retreated from 12-year peaks, but volatility is expected to remain high as companies prepare to report an expected slide in first-quarter earnings and outline more drastic plans to bolster cash reserves.
Exxon Mobil throttled back a multi-year investment spree in shale, LNG and deep water oil production, saying it would cut planned capital spending this year by 30 per cent as the pandemic saps energy demand.
Oilfield services firm Halliburton Co said it would cut about 350 jobs in Oklahoma and that its executives would reduce their salaries.
Exxon and Halliburton shares jumped 4.9 per cent and 5.7 per cent, respectively, also tracking a surge in oil prices amid hopes the world’s main oil producers would agree to a cut in output at a meeting on Thursday.
Norwegian Cruise Line, Royal Caribbean and Carnival Corp, among the most heavily battered stocks this year due to a near halt in global tourism, rose nearly 25 per cent.
Consumer staples and utilities, broadly considered the safest bets in volatile times, posted the smallest gains among the major S&P 500 sectors.
Gold fell 0.8 per cent on the day.
Advancing issues outnumbered decliners more than 8-to-1 on the NYSE and 3-to-1 on the Nasdaq.
The S&P index recorded three new 52-week highs and no new low, while the Nasdaq recorded nine new highs and nine new lows.