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June 30, 2020, 4:37 p.m. EDT

Dow books best quarter since 1987 despite warnings from Powell and Mnuchin on economy

Fed, Treasury vow to keep up support for economy as U.S. COVID-19 infections climb

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By Mark DeCambre, MarketWatch , Joy Wiltermuth


AFP/Getty Images

U.S. stock-indexes finished higher Wednesday, as data showed a recovery in consumer confidence and higher home prices, helping to offset ongoing concerns about the rising number of new coronavirus cases in many American states.

Both the Dow and S&P 500 index booked their best quarterly performance in more than 20 years, while the Nasdaq Composite had its best quarter since 1999, as the indexes recovered from the lows seen in late March when the coronavirus crisis forced business activity to grind to a halt.

The stock market will be closed on Friday in observance of the Fourth of July holiday.

How did benchmarks perform?

The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.17% gained 217.08, or 0.9%, to settle at 25,812.88, those for the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.06% rose 47.05 points, or 1.5%, to close at 3,100.29, while the Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP -0.87% added 184.61 points, or 1.9%, to end at 10,058.77, its second highest close ever.

On Monday, the Dow gained 580.25 points, or 2.3%, its best one-day percentage climb since June 5, according to Dow Jones Market Data. The S&P 500 index advanced 44.19 points, or 1.5%, to finish at 3,053.24. The technology-laden Nasdaq Composite Index picked up 116.93 points, or 1.2%, to end at 9,874.15.

What drove the market?

Stocks rallied after testimony to Congress by Federal Reserve Chairman Jerome Powell and U.S. Treasury Secretary Steven Mnuchin underscored an ongoing commitment to anchor the U.S. economy through the global public health disaster.

Recap : Mnuchin, Powell testify before House panel on coronavirus aid

Mnuchin said the Treasury and Fed were looking at extending the Fed’s established 11 emergency lending facilities to include asset-based lending markets, but also reiterated that additional types of COVID-19 aid likely will need to be addressed by Congress under the next phase of stimulus.

Powell emphasized that the ‘overriding goal’ of the central bank’s facilities is to help get the roughly 25 million workers who lost jobs during the pandemic back to work, while also warning that a second wave of COVID-19 infections could undermine consumer confidence again.

“While this bounce back in economic activity is welcome, it also presents new challenges—notably, the need to keep the virus in check,” Powell said.

The hearing was required by the $2 trillion relief package Congress approved in March and came as the global tally for confirmed cases of the coronavirus that causes COVID-19 rose to 10.3 million on Tuesday, according to data aggregated by Johns Hopkins University. Within the U.S., infections have climbed in 35 states over the past 14 days, according to a New York Times tracker, with California, Texas and Florida leading the way.

“The government’s inability to restrain public behavior, even through something as simple as ensuring mask compliance, is a dangerous threat to the economy of the U.S.,” said Eric Schiffer, chief executive officer of private-equity firm Patriarch Organization, in Beverly Hills. “It ensures this cycle of viral pain continues longer than it should,” he told MarketWatch.

Both New Jersey and New York, states that have been seeing a smaller rise in new cases, have said that they may be forced to delay aspects of their business reopening plans as the virus spreads elsewhere.

/zigman2/quotes/210598065/realtime
US : Dow Jones Global
27,433.48
+46.50 +0.17%
Volume: 324.93M
Aug. 7, 2020 5:10p
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/zigman2/quotes/210599714/realtime
US : S&P US
3,351.28
+2.12 +0.06%
Volume: 2.28B
Aug. 7, 2020 5:10p
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/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
11,010.98
-97.09 -0.87%
Volume: 3.85M
Aug. 7, 2020 5:16p
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