S&P 500, Dow track best quarter since 1998 on stimulus-led rebound hopes
(Reuters) – The S&P 500 and Dow Jones indexes gained on Tuesday, inching closer to ending their best quarter since 1998 as improving economic data restored faith in a stimulus-backed rebound for the U.S. economy.
Kicking off a data-heavy week for Wall Street, figures on Tuesday showed U.S. consumer confidence increased much more than expected in June. Data on manufacturing activity and employment are due on Wednesday and Thursday.
Still, analysts warned portfolio rebalancing at the end of the quarter could lead to choppy trading through the session.
“We are finishing up one of the best quarters in history, so we wouldn’t be surprised to see a little bit of window dressing taking place on the last day,” said Sal Bruno, chief investment officer at IndexIQ in New York.
The benchmark S&P 500 has rebounded nearly 19% since April on a raft of fiscal and monetary stimulus and the easing of lockdown restrictions, but is still down about 5% on the year as a flare-up in virus cases threatened to delay reopenings and derail a tentative economic recovery.
Simmering U.S.-China tensions also weighed on sentiment, with Washington beginning to eliminate Hong Kong’s special status under U.S. law in response to China’s national security law for the territory. China said it would retaliate.
All the 11 major S&P 500 sectors were trading slightly higher, with real estate .SPLRCR and information technology .SPLRCT stocks leading gains.
Federal Reserve Chair Jerome Powell, who will testify before the U.S. House of Representatives Financial Services Committee at 12:30 p.m. ET, said in prepared remarks the outlook for the world’s biggest economy was “extraordinarily uncertain”.
At 11:11 a.m. ET, the Dow Jones Industrial Average .DJI was up 60.79 points, or 0.24%, at 25,656.59, the S&P 500 .SPX was up 23.34 points, or 0.76%, at 3,076.58, and the Nasdaq Composite .IXIC was up 108.17 points, or 1.10%, at 9,982.33.
In company news, Boeing Co (BA.N) tumbled 5% and was the biggest drag on the blue-chip Dow after Norwegian Air (NWC.OL) canceled orders for 97 aircraft and said it would claim compensation.
Micron Technology Inc (MU.O) jumped 6.7% as it forecast higher-than-expected current-quarter revenue on strong demand for its chips that power notebooks and data centers.
The company’s commentary on improving data center demand also boosted other chipmakers, with the Philadelphia semiconductor index .SOX up 2.6%.
Uber Technologies Inc (UBER.N) rose 3.8% after reports said the ride-hailing services company was in talks to buy food-delivery app Postmates.
Advancing issues outnumbered decliners more than 2-to-1 on the NYSE and 1.83-to-1 on the Nasdaq.
The S&P index recorded six new 52-week highs and no new low, while the Nasdaq recorded 44 new highs and nine new lows.
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