Wall Street clawed back the last of the historic, frenzied losses unleashed by the coronavirus, as the S&P 500 closed at an all-time high today.
The benchmark index notched a modest 0.2% gain to beat its previous record high set on Feb. 19, before the pandemic shut down businesses around the world and knocked economies into their worst recessions in decades.
The S&P 500′s milestone caps a furious 51.5% rally that began in late March. Tremendous amounts of aid from the Federal Reserve and Congress helped launch the rally, which built momentum on signs of budding growth in the economy.
Stock indexes were drifting mostly higher on Wall Street today, placing the S&P 500 once again on track to eclipse its record closing high after falling short of doing so several times in recent days.
The benchmark index was up 0.3% at 3,392 in afternoon trading, above its all-time closing high of 3,386.15, which was set in February before the pandemic pancaked the economy. It’s the fourth time in the last week that’s happened, and each past time, the index faded back below that record level during the afternoon.
Earlier, the S&P 500 crested above 3,393.52 for the first time, which had stood since Feb. 19 as the highest level it ever touched within a day’s trading.
The Dow Jones Industrial Average was down 31 points, or 0.1%, at 27,813, as of 2:52 p.m. Eastern time, and the Nasdaq composite was up 0.8%.
“It just seems like the path of least resistance for the market is higher,” said Brian Price, head of investment management for Commonwealth Financial Network. “We’re seeing this slow grind up for the past few weeks.”
Trading has been very quiet in recent days after a tremendous rally since March wiped out virtually all of the nearly 34% drop the S&P 500 suffered earlier from its all-time high. Tremendous amounts of aid from the Federal Reserve and Congress helped launch the rally, which built higher on signs of budding growth in the economy. More recently, corporate profit reports that weren’t as bad as expected have helped boost stock prices.
Now, analysts say markets are taking a pause with less news flowing in amid a seasonally slow period of trading. Big U.S. companies are mostly finished reporting their earnings for the spring, while investors are waiting to see if Congress and the White House can get past their partisan differences and agree on more aid for the economy.
It’s mostly just retailers left in the S&P 500 to report their second-quarter results, and several continued the strong recent trend of delivering better results than expected.
Walmart and Home Depot reported better results than analysts expected. Walmart benefited from surging sales for its online business, as customers looked to buy necessities without having to go to a store. Home Depot, meanwhile, saw more people picking up do-it-yourself projects as the pandemic kept many working from home.
Their stocks, though, were muted. Walmart was down 0.3% after waffling between small gains and losses. Home Depot slid 1.2%.
Home Depot’s report coincided with data from the Commerce Department showing a recovery is continuing for home construction. Builders broke ground on more new homes in July than economists expected, and at a faster pace than June. The report helped push homebuilder shares broadly higher. KB Home was up 1.6%
The housing report echoes other data that have shown budding improvements across the economy since the spring, as widespread shutdowns have eased. The worry, though, is that conditions could backtrack if coronavirus counts worsen or if Washington can’t broker a deal on more aid for an economy that investors say absolutely needs it. Extra unemployment benefits for workers and other stimuli for the economy have already expired.
Numerous other risks are also hanging over the market. The world’s two largest economies keep ratcheting up their tensions, and China today accused Washington of damaging global trade with sanctions that threaten to cripple tech giant Huawei. China added that it will protect Chinese companies, though it gave no indication of possible retaliation.
The yield on the 10-year Treasury dipped to 0.67% from 0.69% late Monday.
“It’s important to recognize that the bond market doesn’t seem to trust this rally,” Price said. “You look at 10-year Treasury and it has not advanced to the point where the bond market is optimistic about the recovery.”
In Asia, South Korea’s Kospi led regional losses, slumping 2.5% amid worries over surging coronavirus cases. Hong Kong’s Hang Seng index lost 0.2%, Japan’s Nikkei 225 slipped 0.2% and stocks in Shanghai added 0.4%.
In Europe, Germany’s DAX slipped 0.3%. The French CAC 40 lost 0.7%, and the FTSE 100 in London dropped 0.8%.
Benchmark U.S. crude oil fell 0.3% to $42.77 per barrel. Brent crude, the international standard, gained 0.2% to $45.45 per barrel.
Gold added 0.8% to $2,014.30 per ounce.