(C) Reuters. The spread of the coronavirus disease (COVID-19) in New York
By Uday Sampath Kumar and Devik Jain
(Reuters) – 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.
However, gains were kept in check by 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’.
While cases continue to surge in many states, the U.S. economy is showing signs of pick-up, with data showing consumer confidence increased much more than expected in June.
“There is optimism that the U.S. economy will get to the other side of this and investors have an expectation of improving economic circumstances,” said Michael Cuggino, president at Permanent Portfolio Family of Funds in San Francisco.
Analysts warned that portfolio rebalancing at the end of the quarter could lead to choppy trading in the session.
“We are finishing up one of the best quarters in history, so we wouldn’t be surprised to see a little bit of window dressing taking place on the last day,” said Sal Bruno, chief investment officer at IndexIQ in New York.
The benchmark S&P 500 has rebounded nearly 19% since April on unprecedented levels of fiscal and monetary stimulus and the easing of restrictions.
But it is still down about 5% on the year, with gains for the S&P 500 and Dow in June remaining muted due to the flare-up in virus cases that has threatened to delay reopenings and derail a tentative economic recovery.
Simmering U.S.-China tensions also weighed on sentiment, 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.
Ten of the 11 major S&P 500 sectors were trading higher, with real estate <.splrcr> and technology (SPLRCT) stocks leading gains.</.splrcr>
At 1:06 P.M. ET, the Dow Jones Industrial Average (DJI) fell 28.74 points, or 0.11%, to 25,567.06, the S&P 500 (SPX) gained 20.53 points, or 0.67%, to 3,073.77 and the Nasdaq Composite (IXIC) added 110.99 points, or 1.12%, to 9,985.14.
Micron Technology Inc (O:MU) jumped 4.6% 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, with the Philadelphia semiconductor index (SOX) up 2%.
Uber (N:UBER) rose 4.5% after reports said the ride-hailing services company was in talks to buy food-delivery app Postmates.
Advancing issues outnumbered declining ones on the NYSE by a 1.57-to-1 ratio; on Nasdaq, a 1.60-to-1 ratio favored advancers.
The S&P 500 posted eight new 52-week highs and one new low; the Nasdaq Composite recorded 63 new highs and 12 new lows.
S&P 500 on track for best quarter since 1998 even as virus fears grow
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