(AP) — Wall Street capped its best quarter since 1998 on Tuesday with more gains, a fitting end to a stunning three months for investors as the market screamed back toward its record heights after a torrid plunge.
The S&P 500 climbed 1.5%, bringing its gain for the quarter to nearly 20%. That rebound followed a 20% drop in the first three months of the year, the market’s worst quarter since the 2008 financial crisis that came as the coronavirus pandemic ground the economy to a halt and millions of people lost their jobs.
“It’s the first time you’ve had back-to-back [quarters] like this since the 1930s,” said Willie Delwiche, investment strategist at Baird.
Technology, health care and financial companies powered much of the market’s broad gains Friday. The buying accelerated after a report showed stronger-than-expected improvement in consumer confidence this month.
The S&P 500 gained 47.05 points, to 3,100.29. The Dow Jones industrial average rose 217.08 points, or 0.9%, to 25,812.88. It had briefly been down 120 points. The Nasdaq composite climbed 184.61 points, or 1.9%, to 10,058.77.
The S&P 500 has rallied back to within nearly 8.4% of its record set in February, after being down nearly 34% in late March. At one point earlier this month, it had climbed as close as 4.5%.
The whiplash that ripped through markets in the second quarter came as investors became increasingly hopeful that the economy can pull out of its severe, sudden recession relatively quickly. The hopes looked prescient after reports during the quarter showed that the job market swung back to growth and retail sales rebounded as governments relaxed lockdown orders meant to slow the virus’ spread. Stocks built on gains made toward the end of the first quarter, when promises of massive amounts of aid from the Federal Reserve and Capitol Hill helped put a floor under the market.
But most of Wall Street says not to expect anything close to a repeat of the rocking second quarter. A rise in infections has several states pausing their lifting of restrictions. The surge in confirmed new cases, which has prompted the European Union to bar U.S. travelers from entry, is seeding doubts that the economic recovery can happen as quickly as markets had forecast.
Beyond the coronavirus, analysts also point to the upcoming U.S. elections and other risks that could upset markets. If Democrats sweep Capitol Hill and the White House, which many investors see as at least possible, it could mean higher tax rates, which could weaken corporate profits.
Crude oil has had a similar rebound as stocks through the second quarter, though it’s still well below where it was before the pandemic struck. A barrel of U.S. crude oil slid 43 cents to settle at $39.27 Tuesday. That’s in a different world from April, when prices in one corner of the U.S. crude market briefly went below zero amid worries that collapsing demand would leave nowhere to store all the unused oil. Brent crude oil fell 56 cents to settle at $41.15 a barrel.
The yield on the 10-year Treasury note rose to 0.66% from 0.63% late Monday. It has also rallied back from its lows when recession worries were at their height.
European stocks closed mixed, and Asian markets finished higher.