A surge in travel and tourism-related stocks in Europe and the US dragged Wall Street higher on Tuesday after the markets were closed on Monday for the Memorial Day holiday.
Demand for stocks rose as the long weekend showed more Americans out and about as lockdowns eased. Millions of people also defied some of the social distancing rules.
Investors also focused on positive signs in the global economy, news of the gradual removal of economic restrictions related to COVID-19, and signs that Americans are beginning to feel safe enough to travel and move in larger groups.
Wall Street’s airline group of stocks jumped 16% But investors ignored a warning from the World Health Organisation that the COVID-19 pandemic was not over with more cases reported in Brazil in particular. Infections and deaths continue in the US.
Worries about China-US relations and the grab for greater control over Hong Kong were also ignored.
The Dow climbed 529.95 points, or 2.2%, to end at 24,995.11, after trading above 25,000 earlier in the session.
The S&P 500 index was up 36.32 points, or 1.2%, to close at 2,991.77, while the Nasdaq gained 15.63 points, or 0.2%, finishing at 9,340.22.
The Dow finished the session 15.4% off its all-time closing high in February, the S&P 500 index off by 11.7%, and the Nasdaq less than 5% from its record close.
Crude prices rose on growing confidence that producers are following through on commitments to cut output and as demand for petrol and jet fuel picks up and coronavirus lockdowns ease.
MSCI’s gauge of stock performance in 49 countries jumped more than 2%, as did its emerging markets index, according to Reuters.
The S&P 500 climbed past the 3,000 mark for the first time since March 5, up 37% from March lows but still off about 11% from its all-time high in February. It later closed just under the 3,000 mark.
Europe was powered by a 6.9% surge in travel and leisure shares. On Wall Street, shares of American Airlines, United Airlines Holdings, and US-listed cruise ship operators jumped more than 13%.
But investors ignored the collapse of a major South American airline into bankruptcy and confirmation of big cuts by Air New Zealand.
Latin America’s largest airline, LATAM Airlines Group, and its affiliates in Chile, Peru, Colombia, and Ecuador filed for bankruptcy protection in the United States.
Crude prices rose after Russia claimed its oil output had dropped close to its target of 8.5 million barrels a day for May and June under the supply deal reached by major producers.
Brent futures rose 64 cents to settle at $US36.17 a barrel, while US West Texas Intermediate futures crude settled up $US1.10 at $US34.35.
China’s central bank said it would continue to push to lower interest rates on loans, helping offset tensions between Beijing and Washington over trade, the coronavirus, and Chinese proposals for stricter security laws in Hong Kong.
Comex gold futures settled down $US29.90 or 1.7% at $US1,705.60 an ounce in New York. Gold continued falling in after-hours trading to be down around $US1,701 an ounce at 6 am.
July silver lost 9.8 cents, or 0.6%, at $US17.595 an ounce but fell again in after-hours trading. Comex copper though rose with the July contract up 1.3% to $US2.4185 a pound
