UPDATE: Dow books best quarter since 1987 despite warnings from Powell and Mnuchin on economy
By Mark DeCambre, MarketWatch , Joy Wiltermuth
Fed, Treasury vow to keep up support for economy as U.S. COVID-19 infections climb
U.S. stock-indexes finished higher Wednesday, as data showed a recovery in consumer confidence and higher home prices, helping to offset ongoing concerns about the rising number of new coronavirus cases in many American states.
Both the Dow and S&P 500 index booked their best quarterly performance in more than 20 years, while the Nasdaq Composite had its best quarter since 1999, as the indexes recovered from the lows seen in late March when the coronavirus crisis forced business activity to grind to a halt.
The stock market will be closed on Friday in observance of the Fourth of July holiday.
How did benchmarks perform?
The Dow Jones Industrial Average gained 217.08, or 0.9%, to settle at 25,812.88, those for the S&P 500 index rose 47.05 points, or 1.5%, to close at 3,100.29, while the Nasdaq Composite Index added 184.61 points, or 1.9%, to end at 10,058.77, its second highest close ever.
On Monday (http://www.marketwatch.com/story/dow-futures-rise-to-kick-off-holiday-shortened-week-even-as-coronavirus-cases-top-10-million-world-wide-2020-06-29), the Dow gained 580.25 points, or 2.3%, its best one-day percentage climb since June 5, according to Dow Jones Market Data. The S&P 500 index advanced 44.19 points, or 1.5%, to finish at 3,053.24. The technology-laden Nasdaq Composite Index picked up 116.93 points, or 1.2%, to end at 9,874.15.
What drove the market?
Stocks rallied after testimony to Congress by Federal Reserve Chairman Jerome Powell and U.S. Treasury Secretary Steven Mnuchin underscored an ongoing commitment to anchor the U.S. economy through the global public health disaster.
Recap: Mnuchin, Powell testify before House panel on coronavirus aid (http://www.marketwatch.com/story/mnuchin-powell-testify-before-house-panel-on-coronavirus-aid-live-blog-2020-06-30)
Mnuchin said the Treasury and Fed were looking at extending the Fed's established 11 emergency lending facilities to include asset-based lending markets, but also reiterated that additional types of COVID-19 aid likely will need to be addressed by Congress under the next phase of stimulus.
Powell emphasized that the 'overriding goal' of the central bank's facilities is to help get the roughly 25 million workers who lost jobs during the pandemic back to work, while also warning that a second wave of COVID-19 infections could undermine consumer confidence again.
"While this bounce back in economic activity is welcome, it also presents new challenges--notably, the need to keep the virus in check," Powell said.
The hearing was required by the $2 trillion relief package Congress approved in March and came as the global tally for confirmed cases of the coronavirus (http://www.marketwatch.com/story/coronavirus-tally-global-cases-of-covid-19-103-million-505518-deaths-and-cases-climbing-in-35-us-states-2020-06-30)that causes COVID-19 rose to 10.3 million on Tuesday, according to data aggregated by Johns Hopkins University. Within the U.S., infections have climbed in 35 states over the past 14 days, according to a New York Times tracker, with California, Texas and Florida leading the way.
"The government's inability to restrain public behavior, even through something as simple as ensuring mask compliance, is a dangerous threat to the economy of the U.S.," said Eric Schiffer, chief executive officer of private-equity firm Patriarch Organization, in Beverly Hills. "It ensures this cycle of viral pain continues longer than it should," he told MarketWatch.
Both New Jersey and New York, states that have been seeing a smaller rise in new cases, have said that they may be forced to delay aspects of their business reopening plans as the virus spreads elsewhere.
Earlier New York Fed President John Williams on Tuesday warned that the worst of the early days of the pandemic may be over, but noted that the economy remains damaged, at a virtual talk sponsored by the Institute of International Finance (http://www.marketwatch.com/story/feds-williams-warns-that-us-economy-far-from-healthy-even-if-worst-of-the-coronavirus-outbreak-is-over-2020-06-30).
Powell's promise on Tuesday to keep doing whatever it takes to support the U.S. economy until it gets back to where it was before the pandemic reverberated beyond the stock market.
"Those are pretty strong words and pretty strong actions," said David Norris, head of U.S. credit at TwentyFour Asset Management, in an interview with MarketWatch. "We know the road ahead is going top be filled with uncertainty, mostly driven by the trajectory of the virus, but we also know we have the support of the Fed."
In a separate hearing Tuesday, public-health expert Dr. Anthony Fauci warned (Fauci%20says%20the%20American%20public%20and%20U.S.%20lawmakers%20are%20failing%20at%203%20critical%20things%20in%20battle%20against%20COVID-19)that the U.S. could see 100,00 new coronavirus infections a day in the U.S., unless everyone steps up their game. Speaking at the Senate Health, Education, Labor and Pensions Committee in Washington, D.C., Fauci said many states have reopened too quickly, and people are not abiding by rules of social distancing.
In U.S. economic data, the Case-Shiller house price index rose 4% (http://www.marketwatch.com/story/home-price-gains-remained-steady-in-april-as-the-coronavirus-swept-across-the-country-case-shiller-index-shows-2020-06-30) on an annual basis in April. The index of consumer confidence rose to 98.1 (http://www.marketwatch.com/story/consumer-confidence-jumps-to-3-month-high-but-still-well-below-precrisis-levels-2020-06-30) this month from a revised 85.9 in May, the Conference Board said Tuesday, though the level of confidence still remains well below pre-crisis levels.
Which stocks were in focus?
How did other assets perform?
West Texas Intermediate (http://www.marketwatch.com/story/oil-prices-retreat-as-coronavirus-cases-and-oversupply-worries-haunt-industry-2020-06-30)U.S. crude for August delivery slipped 43 cents, or 1.1%, to settle at $39.27 a barrel on the New York Mercantile Exchange, leaving oil prices for the year's first half down nearly 36%. (http://www.marketwatch.com/story/oil-prices-inch-higher-friday-but-set-to-post-a-weekly-loss-amid-lingering-worries-about-coronavirus-impacts-2020-06-26)In precious metals (http://www.marketwatch.com/story/gold-prices-see-subdued-action-as-metals-wrap-up-month-quarter-and-2020s-first-half-2020-06-30), gold futures shot up $19.30, or 1.1%, to finish at $1,800.50 an ounce, with the most-active contracts gaining 18% in the first half of 2020.
The 10-year Treasury note (http://www.marketwatch.com/story/10-year-treasury-yields-hangs-around-six-week-low-as-coronavirus-fears-dog-wall-street-2020-06-30) yield was 1.7 basis points higher at 0.653%. Bond prices move inversely to yields.
The greenback was down 0.2% against a basket of its major rivals, based on trading in the ICE U.S. Dollar Index .
In European equities, the Stoxx Europe 600 index closed 0.1% higher and London's FTSE 100 fell 0.9%.
In Asian markets, the Japanese Nikkei gained 1.3%, Hong Kong's Hang Seng picked up 0.5%, while South Korea's Kospi climbed 0.7%. China's CSI 300 rallied 1.3%, while the Shanghai Composite Index advanced 0.8%.
-Joy Wiltermuth; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
June 30, 2020 22:59 ET (02:59 GMT)
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