U.S. stocks on pace to book fresh all-time highs, as investors embrace optimism


U.S. equity benchmark indexes were trading in record territory Wednesday afternoon, as investors drew hope from progress in the development of tests and vaccines for COVID-19, along with the potential for another fiscal stimulus package in Washington.

Investors also largely ignored a mixed batch of economic reports, including a private-sector jobs reading that came in weaker than expected suggesting only a slow recovery from the coronavirus pandemic.

The Dow Jones Industrial Average
DJIA,
+1.58%

gained 375 points, or 1.3%, at 29,020, edging nearer to its Feb. 12 closing high of 29,551.42. The S&P 500 index
SPX,
+1.53%

climbed 44 points, or 1.3%, at 3,573, a new intraday record, while the Nasdaq Composite Index
COMP,
+0.97%

advanced 91 points to reach 12,031, a gain of 0.8%, after setting its own intraday all-time high at 12,050.46.

On Tuesday, the Dow rose 215.61 points to end at 28,645.66, or 0.8% higher, the S&P 500 index  added 26.34 points to close at a record 3,526.65, a gain of 0.8%, after setting an intraday record of 3,528.03; while the Nasdaq Composite Index advanced 165.21 points to a record 11,939.67 finish, a rise of 1.1%, after touching a new intraday all-time high of 11,945.72.

What’s driving the market?

Stock markets were on pace to touch fresh records Wednesday, with a number of possible catalysts boosting the investing mood amid the coronavirus pandemic. Bloomberg reported that U.S. Treasury Secretary Steven Mnuchin again restarted talks with House Speaker Nancy Pelosi, sparking fresh hope of another fiscal stimulus plan to help out-of-work Americans.

On the health front, the leading infectious disease health expert Dr. Anthony Fauci said that a COVID-19 pandemic cure could come sooner than expected if the roster of companies attempting to achieve a vaccine are able to produce outstanding preliminary results.

Speaking to Kaiser Health News, Fauci said the board overseeing vaccine approvals could decided that “the data is so good right now that you can say it’s safe and effective.”

The global tally for confirmed cases of the coronavirus that causes COVID-19 climbed to 25.8 million on Wednesday, according to data aggregated by Johns Hopkins University, while the death toll rose to 857,552

Buying continued in large-capitalization technology stocks and shares tied to pandemic stay-at-home trends, which on Tuesday led the S&P 500 index to record its 21st record close of 2020 and the Nasdaq Composite its 41st, but also for consumer goods and auto makers.

Microsoft Corp.
MSFT,
+1.92%
,
Facebook, Inc.
FB,
+2.39%

and Intel Corporation
INTC,
+2.87%

shares were punching higher, but so were those of Ford Motor Corp
F,
+1.75%

and General Motors Co.
GM,
+3.92%
.

“The unprecedented fiscal and monetary stimulus, not only in the U.S., but around the world, is going to provide the economy with a bridge,” said Chris Armbruster, a portfolio manager at Kayne Anderson Rudnick, in Los Angeles, which he sees as a good reason for investors to look beyond the recent, alarming contraction in gross domestic product and historically high rates of unemployment, to what lies ahead.

To that end, the U.S. government will end up running its biggest budget shortfall ever this year, at $3.311 trillion, the nonpartisan Congressional Budget Office said Wednesday.

But Armbruster also sees many companies that have been forced by the pandemic to adopt technologies and make improvements to their supply chains that are “going to help companies grow and recover faster, and realize better margins.”

Stocks advanced despite a rash of mixed economic data. Automatic Data Processing Inc
ADP,
+2.85%

data showing 428,000 private-sector jobs were created in August, missing expectations for a gain of 900,000 jobs, according to a consensus of estimates surveyed by Econoday.

“It’s a pretty substantial miss, but still much better than what we saw last month,” said Mike Loewengart, managing director investment strategy at E-Trade Financial, via email.

ADP did, however, raise last month’s jobs figure to 212,000 for July from a rise of 167,000, which was then below forecast of 1.9 million jobs. The economy has recouped fewer than half of the 20 million-plus jobs lost in the early stages of the coronavirus pandemic.

Separately, U.S. factory orders rose 6.4% in July for a third straight increase, reflecting a rebound in manufacturing after the economy reopened. Economists polled by MarketWatch had forecast a 6.2% gain. The Federal…



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