(Reuters) – The S&P 500 hit more than a two-month high on Wednesday as signs of additional economic stimulus raised hopes of a swift recovery from a coronavirus-driven slump
The tech-heavy Nasdaq was trading at its highest level in three months and was about 5% below record levels, supported by a surge in shares of Facebook Inc and Amazon.com Inc to their all-time highs.
Gains were broad-based, with technology and communication services providing the biggest boost to the benchmark S&P. The small-cap Russell 2000 index was up 2.5%.
A day earlier, U.S. Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell reassured investors that policymakers were ready with more aid for ailing sectors.
Massive stimulus actions and the easing of virus-led restrictions have fueled hopes of an economic recovery and helped the three main indexes climb about 35% from their March lows.
“You have the S&P 500, Nasdaq and small caps all rallying – you have a widening breadth of strength that is giving investors encouragement,” said Sam Stovall, chief investment strategist at CFRA Research.
“In general Wall Street is saying ‘I factored in a worst case scenario and now it appears as if things are not as bad as they might be’”.
At 13:10 p.m. ET, the Dow Jones Industrial Average was up 287.23 points, or 1.19%, at 24,494.09, the S&P 500 was up 41.54 points, or 1.42%, at 2,964.48. The Nasdaq Composite was up 155.35 points, or 1.69%, at 9,340.46.
The S&P 500 rose above its 100-day moving average, a closely watched technical indicator.
“If we can break through the 3,000 level (on the S&P 500) with some conviction, that’s going to be a positive sign, and it’s probably going to draw more money off the sidelines,” said Robert Pavlik, senior portfolio manager at Slatestone Wealth Llc in New York.
Target Corp slipped 2.9% after the big box retailer reported a 64% plunge in quarterly profit, pummeled by costs to tackle the coronavirus outbreak.
S&P 1500 airlines index gained about 3.7% as Delta Air Lines Inc chief executive officer said he was confident travel will return in the next 12 to 18 months.
Advancing issues outnumbered decliners by a 3.92-to-1 ratio on the NYSE and by a 3.36-to-1 ratio on the Nasdaq.
The S&P index recorded 13 new 52-week highs and no new lows, while the Nasdaq recorded 69 new highs and nine new lows.
Reporting by Ambar Warrick and Medha Singh in Bengaluru; Editing by Arun Koyyur and Anil D’Silva