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US STOCKS-S&P 500 clears 3,000 barrier on economic recovery and vaccine hopes

Published 05/27/2020, 02:30 AM
Updated 05/27/2020, 02:40 AM
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(For a live blog on the U.S. stock market, click LIVE/ or
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* Novavax jumps, to test vaccine candidate on humans
* Beaten down travel-related stocks surge
* Trump is "miffed" with China -Kudlow
* Indexes up: Dow 2.75%, S&P 1.9%, Nasdaq 0.94%

(Updates to late afternoon, adds commentary, changes byline,
adds New York dateline)
By Sinéad Carew
New York, May 26 (Reuters) - U.S. stocks jumped on Tuesday,
propelling the S&P 500 past the key psychological level of 3,000
points as optimism about developing coronavirus vaccines and the
revival of business activity helped investors overlook simmering
China-U.S. tensions.
The benchmark S&P 500 crossed 3,000 for the first time since
March 5, but came off session highs after White House adviser
Larry Kudlow said President Donald Trump was "so miffed with
China on virus and other matters that the trade deal is not as
important to him as it once was." Still, all 11 S&P sector indexes were higher, with cyclical
financials .SPSY up 5.7% and industrials .SPLRCI rising
4.7%.
The S&P 500 .SPX has risen about 37% from its March lows
on central bank and government stimulus at a time when the U.S.
economy is seeing its biggest job losses since the Great
Depression of the 1930s. It is now about 11% below its February
record high.
On Monday, California, which has had one of the country's
most restrictive shutdowns, said it would allow retail
businesses to offer in-store shopping and places of worship to
reopen. "There's more optimism about the vaccines and all the 50
states have reopened to various degrees," leading to optimism
that the U.S. economy would improve, said John
Praveen, portfolio manager at QMA, a PGIM company.
Data showed U.S. consumer confidence nudged up in May,
adding to hopes that the worst of the economic impact of the
shutdown is in the past. At 2:05 p.m. ET, the Dow Jones Industrial Average .DJI
rose 673.38 points, or 2.75%, to 25,138.54, the S&P 500 .SPX
gained 56.27 points, or 1.90%, to 3,011.72, and the Nasdaq
Composite .IXIC added 87.61 points, or 0.94%, to 9,412.20.
U.S. biotech group Novavax Inc NVAX.O jumped 8% as it
joined the race to test coronavirus vaccine candidates on humans
and enrolled its first participants. Merck & Co Inc MRK.N
added 2% as it announced plans to develop two separate vaccines.
With macroeconomic data pointing at a deep recession,
analysts warned that financial markets could be betting on too
fast a recovery.
"The impact on the economy and corporate earnings will be
seen for several quarters, (and) I'm not sure if it has been
completely baked into the equity prices," Robert Wyrick, chief
investment officer at Post Oak Private Wealth Advisors in
Houston, told the Reuters Global Markets Forum.
Beaten-down travel-related stocks soared, with the S&P 1500
airlines index .SPCOMAIR up about 13.4%. Cruise operators
including Carnival Corp CCL.N were more than 13.7%.
The New York Stock Exchange on Tuesday partially reopened
its trading floors at the iconic 11 Wall Street building, which
had been closed since March 23. Advancing issues outnumbered declining ones on the NYSE by a
6.68-to-1 ratio; on Nasdaq, a 3.27-to-1 ratio favored advancers.
The S&P 500 posted 13 new 52-week highs and no new lows; the
Nasdaq Composite recorded 103 new highs and eight new lows.

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