S&P 500 ends best quarter since 1998 on a high note

S&P 500 ends best quarter since 1998 on a high note

The S&P 500 on Tuesday inched closer to finish its best quarter in more than two decades as improving economic data restored faith in a stimulus-backed rebound for the U.S. economy.

The spread of the coronavirus disease (COVID-19) in New York
FILE PHOTO: Traders wear masks as they work on the floor of the New York Stock Exchange in response to the outbreak of the coronavirus disease (COVID19) in the Manhattan borough of New York, U.S., May 27, 2020. REUTERS/Lucas Jackson

NEW YORK: The S&P 500 rallied on Tuesday to finish higher and secure its biggest quarterly percentage gain in more than two decades as improving economic data bolstered investor beliefs that a stimulus-backed rebound for the U.S. economy was on the horizon.

Coming off a drop of 20per cent in the first quarter, the biggest quarterly decline since the financial crisis in the fourth quarter of 2008, the S&P rallied more than 19per cent to notch its biggest quarterly gain since 1998, at the height of the tech boom.

The gains have been fueled by unprecedented levels of fiscal and monetary stimulus and the easing of restrictions.

But the S&P 500 is still down about 4per cent on the year, and gains in June stood just over 1per cent due to the flare-up in virus cases that has threatened to delay reopenings and derail a tentative economic recovery. Federal Reserve Chairman Jerome Powell reiterated in comments on Tuesday that the path of the economy is "highly uncertain."

"What everybody sees is if we can get something that puts an end to the spread or the spread becomes less, there is literally so much money out there that the Fed has put out there that when we turn, it is going to be a rocket ship the other way," said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago.

Still, comments from Anthony Fauci, the U.S. government's top infectious diseases expert, who said there was no guarantee the United States will have an effective COVID-19 vaccine and warned the virus spread "could get very bad," were a reminder that a full economic recovery could be a long road.

Gains were capped on the Dow, pressured by a drop in Boeing Co , as the airplane maker gave back some of Monday's 14per cent surge after Norwegian Air canceled orders for 97 aircraft and said it would claim compensation.

Unofficially, the Dow Jones Industrial Average rose 241.16 points, or 0.94per cent, to 25,836.96, the S&P 500 gained 48.55 points, or 1.59per cent, to 3,101.79 and the Nasdaq Composite added 190.65 points, or 1.93per cent, to 10,064.81.

While coronavirus cases continue to surge in many states, the U.S. economy is showing signs of pickup, with data indicating consumer confidence increased much more than expected in June.

Simmering U.S.-China tensions also remained a possible headwind, with Washington beginning to eliminate Hong Kong's special status under U.S. law in response to China's national security law for the territory. China said it would retaliate.

All of the 11 major S&P 500 sectors traded higher, with energy stocks leading the pack.

Micron Technology Inc jumped 3.9per cent as it forecast higher-than-expected current-quarter revenue on strong demand for its chips that power notebooks and data centers.

The company's results also boosted other chipmakers and lifted the Philadelphia semiconductor index .

Uber rose after reports that the ride-hailing services company was in talks to buy food-delivery app Postmates.

(Reporting by Chuck Mikolajczak in New York; Editing by Matthew Lewis)

Source: Reuters

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