US stocks end up on optimism about coronavirus vaccines, reopenings

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The S&P 500 brief rallied above the key 3,000 mark for the first time since March amid a broad-based upswing fueled by vaccine and re-opening optimism.
A trader walks by the New York Stock Exchange on the first day that traders are allowed back onto the floor. PHOTO: AFP

NEW YORK (AFP) - Wall Street stocks surged on Tuesday (May 26) on optimism about a rebound in the United States, as more states emerge from coronavirus shutdowns and drugmakers step up efforts to find a vaccine.

The Dow Jones Industrial Average finished up 2.2 per cent at 24,995.11.

The broad-based S&P 500 gained 1.2 per cent to 2,991.77, while the tech-rich Nasdaq Composite Index added 0.2 per cent at 9,340.22.

Tuesday's session marks the latest instance of US stocks shrugging off near-term economic pain by focusing on the expected improvement in the second half of 2020, assuming the economy bottoms out in the second quarter.

Analysts also cited fresh announcements about vaccines as another driver of the market surge.

Consumer confidence stabilised in May after two months of sharp declines as shoppers said they were more upbeat about the future, according to a survey from the Conference Board.

But Lynn Franco, senior director of economic indicators at the Conference Board, warned of a cloud of "uncertainty hanging over consumers' heads," due in part to a possible second wave of Covid-19 infections.

At a banking conference, JPMorgan Chase chief executive Jamie Dimon described US consumers as in relatively "good shape" considering the spike in unemployment.

That was due in part to aggressive emergency spending programmes from Washington and the relative stability of housing prices compared to the recession following the 2008 financial crisis, he said.

Dow member Merck gained 1.2 per cent after announcing a series of initiatives in response to the coronavirus, including the acquisition of privately-held vaccine company Themis.

Biotechnology company Novavax jumped 4.5 per cent as it announced it had enrolled the first participants for a phase one trial of a vaccine candidate.

The gains came as the New York Stock Exchange (NYSE) resumed floor trading after shuttering for two months due to the coronavirus.

Under new NYSE safety protocols, all people on the floor must wear masks and have their temperature taken before they are allowed in. Traders will also be separated by plexiglas and required to respect social distancing rules.

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