U.S. stocks extended gains Tuesday on hopes the peak of the coronavirus pandemic surge may be near in some places in the U.S. and Europe.
The Dow Jones Industrial Average jumped 600 points, a day after soaring more than 1,600 points. The Standard & Poor’s 500 rose 2.5%, adding to gains after it posted its best day in nearly two weeks on Monday. All 11 sectors in the broad index were higher, led by gains in energy, real estate and industrial shares.
Investors have been anxiously watching for signs that the rate of new infections may be hitting its peak, which would give some clarity about how long the upcoming recession will last and how deep it will be. The S&P 500 is still down more than 21% since its record set in February, but the losses have been slowing since Washington promised massive amounts of aid to prop up the economy.
China on Tuesday reported no new deaths from the coronarivus over the past 24 hours. The number of new coronavirus cases was dropping in the European hotspots of Italy and Spain.
Market sentiment improved to a potential peak in New York’s new case growth. Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, pointed to fewer deaths and hospitalizations in New York City.
“The idea is this: the trajectory of this economic and financial crisis depends heavily on when the U.S. economy can start back up,” Lauren Goodwin, economist and multi-asset portfolio strategist at New York Life Investments, said in a note. “If case growth in New York has peaked, then case growth in the U.S. is about two weeks behind and we would likely have avoided an even-more-painful credit crisis.”
There were nearly 370,000 confirmed cases of coronavirus in the U.S. and almost 11,000 deaths. Worldwide, there are 1.3 million cases early Tuesday, according to the Johns Hopkins University data dashboard.
“U.S. officials still expect a deadly week, and several experts reiterated that easing the social distancing measures prematurely could lead to secondary outbreaks both in Europe and the U.S.,” Ken Berman, strategist at investment advice platform Gorilla Trades, said in a note. “The fact that the numbers in New York are not rising at an exponential pace is a huge plus, with the European development also improving the U.S. outlook.”
Energy markets remained volatile as traders looked for signs that Saudi Arabia and Russia may back off their price war and cut back on some of their production. Demand for oil has plummeted due to the weakening economy, and any cutback in production would help prop up its price. A meeting between OPEC, Russia and other producers initially planned for Monday was pushed back to Thursday.
Benchmark U.S. crude added 82 cents to $26.90 per barrel. It fell $2.26, or 8%, to settle at $26.08 a barrel Monday after surging nearly $7 last week. It started the year above $60 per barrel. Brent crude, the international standard, rose 82 cents to $33.87 a barrel.
France’s CAC 40 stock index was up nearly 3.4%, while Germany’s DAX jumped 4%. Britain’s FTSE 100 added 2.7%.
In Asia, Japan’s benchmark Nikkei 225 gained 2.0% to finish at 18,950.18 ahead of Prime Minister Shinzo Abe’s announcement of a state of emergency in Tokyo and six other regions. Hong Kong’s Hang Seng added 2.1%, while the Shanghai Composite jumped nearly 2.1%.
Contributing: The Associated Press