U.S. Stocks Rise While China Rally Powers Ahead
|07/08/2020 | 05:00pm|
By Joe Wallace and Gunjan Banerji
U.S. stocks rose Wednesday, while mainland Chinese shares extended their winning streak for a seventh consecutive day.
Major indexes wavered for much of the day before turning higher late in the session. The jump helped claw back losses from the prior session, when the S&P 500 fell and snapped its five-session winning streak.
Stocks have traded in a narrow range for the past month, after zipping higher for much of the second quarter. Investors have been weighing stimulus efforts by central banks and governments against signs that the rebound in U.S. economic growth has lost speed. Meanwhile, there's been a jump in coronavirus cases in parts of the country, and tensions have risen between China and the U.S.
"I would characterize the stock market as relatively immune to the [health] crisis," said Gregory Perdon, co-chief investment officer at Arbuthnot Latham & Co., a U.K. private bank. It is difficult for stock prices to go down when stimulus measures by the Federal Reserve and European Central Bank have pinned down bond yields, he added.
That has been on display this week.
The Nasdaq Composite added 148.61 points, or 1.4%, to 10492.50 on Wednesday, clinching a fresh record. The S&P 500 advanced 24.62 points, or 0.8%, to 3169.94, led higher by shares of technology companies. The Dow Jones Industrial Average gained 177.10 points, or 0.7%, to 26067.28.
Despite the recent stock gains, there are signs investors are looking for safety. Gold prices are hovering at the highest level since September 2011, settling Wednesday at $1815.50 a troy ounce.
Meanwhile, shares of hotels, airlines, restaurants and other companies that have been heavily affected by coronavirus-related lockdowns have fallen over the past month.
"There's definitely never been more unknown unknowns out there. We'll have to see whether the economy can stay open and people can get back to work," said Nancy Davis, portfolio manager of the Quadratic Interest Rate Volatility and Inflation Hedge Exchange-Traded Fund.
The unemployment rate fell in June but still hovered at 11.1%.
And the U.S. on Tuesday reported 60,000 new coronavirus cases, a single-day record, according to data compiled by Johns Hopkins University.
Chinese shares resumed their recent spurt, pushing the Shanghai Composite Index up 1.7%. The index has advanced 8% this week as individual investors bet that a recovering economy will boost profits. The streak has revived memories of an earlier rally in Chinese stocks in 2015, which ended in a crash.
International stock markets were mixed. Japan's Nikkei 225 Index was down 0.8%. The Stoxx Europe 600 fell 0.7%.
Write to Joe Wallace at Joe.Wallace@wsj.com and Gunjan Banerji at Gunjan.Banerji@wsj.com