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U.S. stocks ended slightly higher Tuesday for a second straight day, but finished well off session highs, as investors watched business restrictions begin to ease in the U.S. and Europe and progress toward an early vaccine to prevent the further spread of the COVID-19 pandemic.
Rising crude oil prices also bolstered equity benchmarks as Wall Street looked to corporate earnings for an outlook on the pandemic, with Disney’s results in focus after the close.
How did the benchmarks fare?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.05% gained 133.33 points, or 0.6%, to end at 24,883.09, the S&P 500 index /zigman2/quotes/210599714/realtime SPX +1.40% advanced 25.70 points to finish at 2,868.44, a gain of 0.9%, while the Nasdaq Composite index /zigman2/quotes/210598365/realtime COMP +2.13% added 98.41 points, or 1.1%, to close at 8,809.12.
On Monday, the Dow managed a gain of 26.07 points, or 0.1%, to end at 23,749.76, and the S&P 500 gained 12.03 points, or 0.4%, finishing at 2,842.74, with both benchmarks erasing declines of more than 1% for their sharpest intraday reversals since March, according to Dow Jones Market Data. The Nasdaq Composite rose 105.77 points, or 1.2%, closing at 8,710.7.
What drove the market?
U.S. stocks eked out a second consecutive day of gains as investors weighed a cloudy picture of the economy against U.S. businesses starting to slowly reopen after a period of stultifying coronavirus lockdowns.
“There’s hopefulness and enthusiasm when people read stories about states reopening,” John Cary, director of equity income, U.S., at Amundi Pioneer, told MarketWatch. “But it’s not a surprise that we’d have strength followed by a retread again, as people are not placing a great deal of confidence on any earnings outlooks. We just don’t have enough information.”
California Gov. Gavin Newsom on Monday said clothing stores and a number of other retailers could open for curbside pickup starting Friday, while a number of states are slowly attempting to unwind measures put in place to limit the COVID-19 disease.
“California is considering a rollout of reopenings,” Diane Jaffee, senior portfolio manager at TCW told MarketWatch. “It’s literally a juggernaut of U.S. GDP. That’s a big deal.”
New York Gov. Andrew Cuomo on Tuesday reiterated his call for federal aid for New York , the epicenter of the pandemic , a day after he outlined a pathway to reopening parts of his state, but also stressed that such decisions boil down to how much a human life is worth. “Let’s be honest and tell people it’s a tradeoff,” he said of the economic and human toll.
Stocks also saw a modest boost from a rebound in oil prices, which advanced 20% Tuesday for the U.S. benchmark West Texas Intermediate crude for June delivery /zigman2/quotes/211629951/delayed CL.1 -0.26% , as debt-laden producers began to cut output amid a supply glut and demand starts to percolate again.
“We’re seeing an increase in oil demand,” Kent Engelke, chief economic strategist at Capitol Securities Management told MarketWatch, adding that oil is a commodity that “symbolizes economic activity.”
Jaffee pointed out that Marathon Petroleum Corp. /zigman2/quotes/209634297/composite MPC +3.19% said gas stations saw demand for car fuel bottoming on April 6, but that demand since has steadily improved week over week, during its earnings call Tuesday.
Meanwhile, the Wall Street Journal reported that researchers at New York University and the University of Maryland School of Medicine said Tuesday they began injecting people with the first of four vaccine candidates from Pfizer Inc . /zigman2/quotes/202877789/composite PFE +1.43% and Germany’s BioNTech /zigman2/quotes/214419716/composite BNTX +0.96% .
The tests are the most recent efforts in the search for a cure for the disease that has infected more than 3.6 million globally and claimed more than a quarter of a million lives since emerging in Wuhan, China, in December, according to data compiled by Johns Hopkins University.
“It seems like every day another company is coming out with clinical testing on a potential vaccine,” Engelke said.