Wednesday’s Stock Market Close: US Equities Jump On Hopes For Reopened Businesses, Strong Retail Sales

U.S. stocks jumped on Wednesday as some large retailers delivered strong first quarter results and traders were increasingly optimistic that more states will reopen their nonessential businesses.

The Dow Jones Industrial Average gained 369.04 points to 24,575.90, while the S&P 500 rose 48.67 points to 2,971.61 and the Nasdaq Composite Index climbed 190.67 points to 9,375.78.

Wednesday’s volume on the New York Stock Exchange totaled 4.18 billion shares with 2,326 issues advancing, 34 setting new highs, and 627 declining, with seven setting new lows .

Active movers were led by Luckin Coffee Inc. (LK), Nano Dimension Ltd. (NNDM) and Sorrento Therapeutics Inc. (SRNE). ,

The state of Connecticut allowed consumers to dine in at restaurants with outdoor seating on Wednesday, while some other shops also reopened.

“The next three to six weeks are likely to be important for the financial markets as a majority of states are in the process of reopening their economies to varying degrees,” said Scott Wren, senior global market strategist at Wells Fargo Investment Institute, in a note. “[Stocks have already] priced in some degree of reopening success.”

But Wren cautioned: “We continue to believe that consumer spending may be slower to come back than the market appears to currently expect.”

The U.S. Senate passed a bill that would upgrade the oversight of Chinese companies and would also require some Chinese companies to delist from U.S. exchanges.

The minutes from the late April meeting of the Federal Open Market Committee showed that policymakers worried about a second round of covid-19 infections and the pressures facing low-income Americans.

“Participants commented that, in addition to weighing heavily on economic activity in the near term, the economic effects of the pandemic created an extraordinary amount of uncertainty and considerable risks to economic activity in the medium term,” the minutes stated. “In this scenario, a second wave of the coronavirus outbreak, with another round of strict restrictions on social interactions and business operations, was assumed to begin around year-end, inducing a decrease in real GDP, a jump in the unemployment rate, and renewed downward pressure on inflation next year.”

Home improvement retailer Lowe’s (LOW) posted an 11.2% jump in same-store sales for the first quarter.

Target (TGT) said its same-store sales climbed 10.8% in the first quarter due to soaring online sales.

Federal Reserve Bank of Atlanta President Raphael Bostic said he’s not concerned now about price pressures. “As of right now, my focus is on making sure this recovery is as robust as possible and that relief is getting in the hands of the folks who need it,” he stated.

Federal Reserve Bank of St. Louis President James Bullard said he expects the U.S. economy to recover later in the year.

“I think we are more or less on track for where we would have expected to be at this point” [given the aggressive policy measures and] “we have every chance of a good recovery in the second half,” he said.

“I don’t see any reason why 2021 couldn’t be a great year,” Bullard added.

The Mortgage Bankers Association said mortgage applications to buy a home rose by 6% last week from the prior week.

“Applications for home purchases continue to recover from April’s sizable drop and have now increased for five consecutive weeks,” said Joel Kan, an MBA economist.

More than 4.9 million covid-19 cases have been confirmed around the world, with more than 1.5 million in the U.S. alone.

Overnight in Asia, markets finished mixed. The Shanghai Composite fell 0.51%; Hong Kong’s Hang Seng inched up 0.05%; while Japan’s Nikkei-225 rose 0.79%.

In Europe markets closed higher, as Britain’s FTSE-100 rose 1.08%, while France’s CAC-40 climbed 0.87% and Germany’s DAX gained 1.34%.

Crude oil futures gained 4.88% at $33.52 per barrel, Brent crude rose 0.31% at $35.86. Gold futures rose 0.33%.

The euro rose 0.5% at $1.0978 while the pound sterling slipped 0.18% at $1.2229.

The yield on the 10-year Treasury dropped 4.36% to 0.68% while yield on the 30-year Treasury fell 2.51% to 1.399%.