Tuesday's Stock Market Close: US Equities Rise As Some States Prepare To Reopen Businesses, Oil Surges

U.S. stocks closed higher on Tuesday as some large states prepare to open up parts of their economies after a lengthy lockdown, while oil prices jumped for the fifth straight day. Stocks, however, did close well below intraday highs.

The Dow Jones Industrial Average rose 133.33 points to 23,883.09, while the S&P 500 climbed 25.7 points to 2,868.44 and the Nasdaq Composite Index gained 98.41 points to 8,809.12.

Volume on the New York Stock Exchange totaled 4.41 billion shares with 1,689 issues advancing, 22 setting new highs, and 1,272 declining, with six setting new lows.

Active movers were led by Norwegian Cruise Line Holdings Ltd. (NCLH). General Electric Co. (GE) and Portola Pharmaceuticals Inc. (PTLA).

California Gov. Gavin Newsom said on Monday some of his state’s retailers will be permitted to provide curb-side pickup service starting Friday.

“We are entering into the next phase this week,” Newsom said. “This is a very positive sign and it’s happened only for one reason: The data says it can happen.”

New York Gov. Andrew Cuomo said that hospitalizations and new deaths in his state are starting to decline.

Other states, including Florida, Arizona and Colorado, also plan to reopen some businesses. Georgia, Mississippi, Tennessee, Texas and Illinois have already lifted some restrictions on their lockdowns.

The number of global deaths from the coronavirus pandemic has now surpassed 251,000.

“The state openings and [virus] case counts peaking, and also ‘earnings confessions’ are all acting to reduce uncertainty,” said Tom Lee, founder and head of research at Fundstrat Global Advisors. “This is, in our view, the primary reason stocks are drifting higher and shifted into the hands of buyers. The market was overwhelmed with sellers, causing the fastest crash ever. So we think risk/reward still favors buyers.”

“Markets are increasingly looking toward this reopening and the gradual relaxation to some of the rules,” said Eric Winograd, senior economist for fixed income at AllianceBernstein. “[But] the recovery is going to be much more gradual, because it is going to be different paces in different places. If we don’t see an inflection point in the data over the course of the next couple of months, I think that will be troubling to the market.”

Germany's Constitutional Court has determined that the European Central Bank's stimulus program, through purchases of government bonds, partly violated German law.

The Commerce Department said on Tuesday the trade deficit jumped to $44.4 billion in March from a revised figure of $39.8 billion in February.

The ISM Non-Manufacturing Index registered a 41.8% reading in April, 10.7 percentage points below the March reading – the first such contraction since December 2009.

Some analysts worry that the recent stock rally lacks conviction.

“Megacaps mask underlying rally fragility,” said Ken Johnson, investment strategy analyst at Wells Fargo. “This concentration raises concerns about the rally’s long-term health and durability as it suggests that ample liquidity, rather than broadly improving fundamentals, may be fueling it.”

Overnight in Asia, the Shanghai Stock Exchange and the Tokyo Stock Exchange were both closed for holidays, while Hong Kong’s Hang Seng gained 1.08%

In Europe markets finished higher, as Britain’s FTSE-100 rose 1.66%, while France’s CAC-40 climbed 2.4% and Germany’s DAX gained 2.51%.

Crude oil futures jumped 20.4% at $24.55 per barrel, Brent crude rose 0.42% at $31.10. Gold futures gained 0.2%.

The euro slipped 0.53% at $1.0848 while the pound sterling edged up 0.01% at $1.2444.

The yield on the 10-year Treasury surged 3.14% to 0.657% while yield on the 30-year Treasury gained 2.54% to 1.33%.