The Dow ended higher for a second straight day Tuesday, as investors trained their attention on the prospect of fuller business activity in the wake of the coronavirus pandemic, rather than the fresh round of civil unrest in major U.S. cities.
President Donald Trump reiterated threats to deploy military troops across cities facing protests if governors and local officials prove unable to contain violent demonstrations.
How did benchmarks perform?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.57% rose 267.63 points, or 1.1%, to end at 25,742.65, the S&P 500 index /zigman2/quotes/210599714/realtime SPX -0.72% rose 25.09 points, or 0.8%, closing at 3,080.82, and the Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP -0.87% advanced 56.33 points, or 0.6%, to finish at 9,608.37, after trading negative earlier in the session.
On Monday, the Dow rose 91.91 points, or 0.4%, to finish at 25,475.02, after trading negative at the start of Monday’s session. The S&P 500 rose 11.42 points, or 0.4%, to end at 3,055.73. The Nasdaq Composite added 62.18 points, or 0.7%, to close at 9,552.05.
What drove the market?
A restart of business activity from the closures due to the COVID-19 pandemic has been cited as the main reason behind the market’s ability to shake off a number of persistent worries of late, including Sino-American tensions and civil unrest in America.
“This has largely been about the pace of the economic restart, which appears to be coming online somewhat more quickly than believed to be the case even a month or six weeks ago,” said Bill Northey, senior investment director at U.S. Bank Wealth Management.
“Certainly there are a host of headline risks out there, but with some of the social unrest activities that’s something the market is looking through,” as there is little fear, so far, that it will impact corporate profits, he added.
Monday night saw a fresh round of conflicts between law enforcement and protesters, which prompted Trump to taunt state governors on Twitter Tuesday for refusing his offer to dispatch troops to quell the demonstrations.
Trump said late Monday at the White House, “If a city or state refuses to take the actions necessary to defend the life and property of their residents, then I will deploy the United States military and quickly solve the problem for them.”
Major cities from Los Angeles to New York have been engulfed in nightly protests after George Floyd, a black man, died last Monday following a confrontation with police in Minneapolis in which a white police officer, Derek Chauvin, was captured on video driving his knee onto Floyd’s neck until the handcuffed man lost consciousness and later died.
Curfews were set to continue across 40 U.S. cities Tuesday night , with New York City’s curfew tightening by three hours, starting at 8 a.m. Eastern and ending at 5 a.m., extending the first such curfew in the city in decades.
“New York City was looted yesterday,” New York’s Gov. Andrew Cuomo said Tuesday in his daily COVID-19 briefing, which outlined plans for the state to soon reopen, even with the outbreak of unrest in Manhattan and poorer neighborhoods.
“The curfew is not to harass protesters and law-abiding citizens,” Cuomo said, but he also called out New York City’s Mayor Bill de Blasio and the New York Police Department for failing to protect people and their property overnight.
Turmoil in the streets has yet to rattle the calm in U.S. stocks. The popular Cboe Volatility Index /zigman2/quotes/210598281/delayed VIX +4.69% , a gauge that tracks implied volatility in the S&P 500 stock index using options, fell 4.9% Tuesday to 26.84, its lowest closing level since late February, according to Dow Jones Market Data.
“Most people on Main Street think it’s crazy where the stock market is trading, especially on a day where you have major protests happening in the U.S.,” Sam Hendel, president of Levin Easterly Partners, a New York asset management firm, told MarketWatch.