Stocks register gains on cautious hopes of economic recovery

Andrew Cummings
June 2, 2020

The stock market is coming off its second month of solid gains.

Wall Street stocks recorded some small gains at the bell on Monday after last week's gains helped major averages record their first back-to-back monthly advances since late 2019.

The S&P 500 rose 11.42 points, or 0.4%, to 3,055.73.

However, market gains were somewhat capped due to fears of a resurgence of the coronavirus in the United States following a weekend of riots and protests in the USA, including outside the White House, in the wake of the death of African American George Floyd in police custody last week.

Futures for Dow Jones Industrials hiked 121 points, or 0.5%, early Tuesday, to 25,589. Last week, the Dow and S&P 500 grew by more than 3 percent and the Nasdaq climbed almost 2 percent. The Russell 2000 index picked up 11.34 points, or 0.8%, to 1,405.37.

The Federal Reserve and Congress have pledged unprecedented amounts of aid for the economy. Now investors are betting that the worst of the recession has already passed, or will soon, as governments around the country and around the world slowly lift restrictions meant to corral the outbreak.

"History shows effectively no correlation between social, political turmoil and stock markets", said David Trainer, CEO of investment research firm New Constructs. Payroll processor ADP issues its May survey of hiring by private US companies Wednesday.

Reports released Monday showed manufacturing activity improving last month in both the United States and China as the world emerged from lockdowns aimed at controlling the virus.

Also lifting market sentiment was a Reuters report, which cited sources, saying state-owned Chinese companies bought at least three cargoes of US soybeans. "Even with these rising protests in the USA and the situation in Hong Kong at the moment, the market is pushing on and seeing room for optimism". Benchmark 10-year notes last fell 4/32 in price to yield 0.6738%, from 0.662% late on Monday.

Investors also shrugged off China's Monday threat of retaliation against President Trump's move to start ending the US's special trade relationship with Hong Kong after Beijing moved to restrict the territory's autonomy. Brent crude oil for August delivery rose 48 cents to $38.32 a barrel. Markets in Asia closed broadly higher.

Alex Veiga and Damian J Troise of The Associated Press wrote this story.

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