(Reuters) – Wall Street’s three major indexes rose on Tuesday as improving economic data and the prospect of more stimulus bolstered hopes of a swift recovery, while a jump in technology shares powered the Nasdaq to another record high.
White House advisor Larry Kudlow said tax rebates and direct mail checks are on the table in the next coronavirus relief bill.
The Nasdaq hit a fifth record high this month with Apple Inc (AAPL.O) providing the biggest boost after at least three brokerages raised their price targets, a day after the iPhone maker said it would use its own chips for Mac computers.
The pace of contraction in U.S. manufacturing and services sectors slowed in June as businesses reopened after the health crisis resulted in a lockdown in mid-March.
Another set of data showed new home sales jumped 16.6% in May, blowing past estimates of a 2.9% rise.
“The market seems to be in a liquidity-driven FOMO (fear of missing out) mode where Fed has your back and U.S. government will probably come back to the table in the next two to three weeks to continue to do more stimulus,” said Nate Fischer, chief investment strategist at Strategic Wealth Partners in Cleveland, Ohio.
“It would be healthy for the market to probably chop sideways here in the next couple weeks and then in earning season see if companies really feel as bullish as the markets.”
Global equity markets were also boosted by President Donald Trump’s assurance that the Phase 1 trade agreement with China was “fully intact” after adviser Peter Navarro sparked confusion by saying the deal was over.
While U.S.-China tensions have been a cause for concern, monetary and fiscal support worth trillions of dollars has in part powered the benchmark S&P 500 .SPX, with the index just about 7% below its Feb. 19 record high.
Nine of the 11 major sub-indexes were higher with technology .SPLRCT and consumer discretionary .SPLRCD posting the steepest gains. The defensive real estate .SPLRCR and utilities .SPLRCU slipped.
At 12:40 p.m. ET, the Dow Jones Industrial Average .DJI was up 229.28 points, or 0.88%, at 26,254.24, the S&P 500 .SPX was up 29.26 points, or 0.94%, at 3,147.12. The Nasdaq Composite .IXIC was up 137.03 points, or 1.36%, at 10,193.50.
Nike Inc (NKE.N) rose 2.3% as brokerages raised their price targets ahead of quarterly results on Thursday.
Boeing Co’s (BA.N) top supplier Spirit AeroSystems Holdings (SPR.N) slipped 14.9% after it said it was seeking relief from lenders as its finances were stretched by the COVID-19 pandemic and a 737 MAX production halt.
Advancing issues outnumbered decliners by a 1.79-to-1 ratio on the NYSE and by a 1.63-to-1 ratio on the Nasdaq.
The S&P index recorded 23 new 52-week highs and no new low, while the Nasdaq recorded 131 new highs and six new lows.