Tuesday’s Stock Market Open: US Equities Rise on Optimism Over New Covid-19 Vaccine, Reopening Of Economies

Update: 12:05 p.m. EDT:

U.S. stocks remained higher as of noon Tuesday.

The Dow Jones Industrial Average surged 598.55 points to 25,063.71, while the S&P 500 gained 49.81 points to 3,005.26 and the Nasdaq Composite Index rose 69.70 points to 9,394.29.

In Europe markets traded higher, as Britain’s FTSE-100 gained 1.24%, while France’s CAC-40 climbed 1.46% and Germany’s DAX rose 1%.

The Commerce Department said new home sales unexpectedly rose by 0.6% in April to a seasonally adjusted annual rate of 623,000 units.

The Conference Board’s consumer confidence index climbed to 86.6 in May from 85.7 in April.

“Following two months of rapid decline, the free-fall in confidence stopped in May,” said Lynn Franco, senior director of economic indicators at The Conference Board. “Short-term expectations moderately increased as the gradual re-opening of the economy helped improve consumers’ spirits.”

Home prices rose by 1.7% quarter-over-quarter and by 5.7% year-over-year in the first quarter of 2020, according to the Federal Housing Finance Agency House Price Index

“Annual house price appreciation was stronger in the first quarter of 2020, compared to a year ago, driven by falling interest rates and declining inventories of homes for sale, over the second half of 2019 and early 2020,” said Lynn Fisher, deputy director of FHFA’s division of research and statistics.

Original story:

U.S. stocks jumped on Tuesday as investors cheered the reopening of more businesses across the U.S. along with optimism over potential new covid-19 vaccines.

The Dow Jones Industrial Average surged 600.52 points to 25,065.68, while the S&P 500 gained 64.57 points to 3,020.02 and the Nasdaq Composite Index rose 171.33 points to 9,495.92.

Biotech firm Novavax (NVAX) said it commenced the first human study of its experimental coronavirus vaccine and expects initial results in July. All told, there are now 10 covid-19 vaccines in clinical evaluation and 114 in pre-clinical evaluation.

The U.S. has now confirmed more than 1.6 million coronavirus cases and almost 100,000 deaths as of Monday.

The New York Stock Exchange reopened its trading floor on Tuesday after a two-month closure, but with strict new rules.

The Chicago Fed National Activity Index dropped to minus-16.74 in April from minus-4.97 in March led by declines in production and employment.

Home prices in March rose 4.4% on an annual basis, up from 4.2% in February, according to the S&P CoreLogic Case-Shiller index.

“March’s data witnessed the first impact of the Covid-19 pandemic on the S&P CoreLogic Case-Shiller Indices,” wrote Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices. “That said, housing prices continue to be remarkably stable. March results were broad-based. Prices rose in each of the 19 cities for which we have reported data, and price increases accelerated in 17 cities.”

However, tensions between the U.S. and China continue to escalate.

Om Sunday, White House National Security Advisor Robert O’Brien warned the U.S. may impose sanctions on China if Beijing enacts a restrictive new national security law in Hong Kong.

“One big threat to the recovery in markets is the escalating war of words between the U.S. and China,” said Shane Oliver, head of investment strategy at AMP Capital Investors in Sydney. “The main focus will likely remain on continuing evidence that the number of new Covid-19 cases is slowing in developed countries, progress towards medical solutions, the reopening of economies and signs that economic activity is picking up.”

“Next month we will know bank stress test results; whether oil prices are a bounce or something more sustained; and if we have moved out of COVID season or into a second wave,” said Christopher Harvey, Wells Fargo’s head of equity strategy. “If things break positively, we would expect to see a healthy rotation toward cyclicals, smaller caps, and value stocks.”

Overnight in Asia, markets finished higher. The Shanghai Composite rose 1.01%; Hong Kong’s Hang Seng gained 1.88%; while Japan’s Nikkei-225 jumped 2.55%.

In Europe markets traded higher, as Britain’s FTSE-100 gained 1.05%, while France’s CAC-40 climbed 1.38% and Germany’s DAX gained 0.95%.

Crude oil futures jumped 3.16% at $34.30 per barrel, Brent crude rose 1.74% at $36.75. Gold futures fell 0.62%.

The euro gained 0.73% at $1.0978 while the pound sterling rose 1.26% at $1.2340.