S&P 500 on track for record closing high

By Ambar Warrick and Medha Singh (Reuters) - The S&P 500 hit a record high on Tuesday, surpassing levels last seen before the onset of the coronavirus crisis in February, ending one of the most dramatic plunges in history with an equally historic recovery.

Reuters August 19, 2020 00:06:57 IST
S&P 500 on track for record closing high

SP 500 on track for record closing high

By Ambar Warrick and Medha Singh

(Reuters) - The S&P 500 hit a record high on Tuesday, surpassing levels last seen before the onset of the coronavirus crisis in February, ending one of the most dramatic plunges in history with an equally historic recovery.

Trillions of dollars in fiscal and monetary stimulus have flushed Wall Street with cash, pushing yield-seeking investors into equities, with technology-related stocks, such as Amazon.com Inc , being viewed as the most reliable to ride out the crisis.

The S&P 500 <.SPX> rose as much as 0.4% to 3,395.06 points during the session. If the benchmark closes above 3,386.15 it would confirm that the index has been in a new bull market since climbing about 55% from its pandemic low on March 23.

Doubts about the underlying health of the economy, however, were writ large in the reaction to bumper results from Home Depot Inc and Walmart Inc , quickly cooling the market off after initial gains.

"This is certainly a circumstance where capital markets are looking beyond the current earnings and economic chasm that have been created by economic shutdowns in response to COVID-19," said William Northey, senior investment director, U.S. Bank Wealth Management at Helena, Montana.

"Capital markets are looking to 2021 and 2022 levels of recovery with a degree of optimism that there is a health solution (to COVID-19) around the corner."

At 1:27 p.m. ET, the Dow Jones Industrial Average <.DJI> was down 28.83 points, or 0.10%, at 27,816.08, the S&P 500 <.SPX> was up 8.00 points, or 0.24%, at 3,389.99. The Nasdaq Composite <.IXIC> was up 65.25 points, or 0.59%, at 11,194.98, hitting a record high for a second straight session.

Consumer discretionary shares <.SPLRCD> rose the most among major S&P sectors on strength in Amazon while technology stocks provided another major support to the benchmark index.

"Technology stocks continue to be the leaders ... that really hasn't changed from what we've been looking at over the past couple of months," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

Home Depot reported its biggest rise in quarterly same-store sales in at least two decades, however, its shares fell about 1% after analysts cautioned that its sales might have hit their peak.

(Graphic: S&P 500's bull-to-bear, bear-to-bull journey in 6 months https://fingfx.thomsonreuters.com/gfx/mkt/jbyprqoodve/Pasted%20image%201597760476411.png)

Walmart traded marginally higher after posting its biggest-ever growth in online sales as shoppers cashed in stimulus checks and ordered everything from electronics and toys to groceries from the safety of their homes amid the COVID-19 pandemic.

Data on Tuesday showed U.S. homebuilding accelerated by the most in nearly four years in July in the latest sign the housing sector is emerging as one of the few areas of strength in an economy suffering a record slowdown.

Minutes from the Federal Reserve's recent meeting, due on Wednesday, may provide some insight into how the central bank sees the recovery playing out. The Fed has cut rates to near zero to bolster business through the pandemic.

Declining issues outnumbered advancers for a 1.37-to-1 ratio on the NYSE and a 1.70-to-1 ratio on the Nasdaq.

The S&P index recorded 30 new 52-week highs and no new low, while the Nasdaq recorded 62 new highs and 15 new lows.

(Reporting by Ambar Warrick and Medha Singh in Bengaluru, Sinead Carew in New York; Editing by Patrick Graham, Anil D'Silva and Shounak Dasgupta)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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