Stocks were mixed Wednesday as the economy continued its slow return to life amid hopes for more federal stimulus and a scientific advances against the coronavirus.
The Dow Jones industrial average jumped more than 335 points at the opening bell before settling at a gain of more than points, or 0.5%, going into the late morning. Financial stocks and beaten-up industrials helped power the blue chips — a comeback that signals confidence in the recovery.
The Dow is building on Tuesday’s 530-point gain, which pushed it within reach of 25,000. The blue chips have not closed above that threshold since March.
“The stock market is like a party animal looking for a reason to celebrate,” Kristina Hooper, chief global market strategist at Invesco, said in an email. “It has yet another reason to celebrate today, however tenuous, as it looks like the White House might be open to more fiscal stimulus. However, there are significant downside risks to this frothy stock market, particularly the possibility for a rise in US–China tensions.”
The broader Standard & Poor’s 500 index gave up early gains and was mostly heading toward noon. Seven of the 11 S&P stock sectors were positive, led by financials and industrials. The S&P technology sector was a big drag on the index.
The Nasdaq dropped more than 1% into the red as investors sold off shares of the big tech winners like Amazon, Microsoft, Micron Technology and Netflix. (Amazon chief executive and founder Jeff Bezos owns The Washington Post.)
“People are rotating out of companies that were benefiting from the pandemic and lockdown and into companies that will benefit from the recovery,” said Ivan Feinseth of Tigress Financial Partners.
Dow component Merck added 1.2% Tuesday after announcing it was teaming up with another company to develop a vaccine, as well as new treatments for covid-19 patients. The pharmaceutical giant is one of several companies racing to develop a vaccine to stop a disease that has claimed nearly 100,000 American lives.
Maryland-based Novavax reported that it entered human study for a coronavirus vaccine. Last week, Massachusetts-based Moderna announced that a small, early trial for its own candidate yielded positive results. Pfizer, Johnson & Johnson and others also are trying to develop a vaccine for use as early as this year.
The pandemic has crushed the U.S. economy. Jobless claims surged toward 40 million last week. The unemployment rate, which spiked to 14.7% in April, is expected to swell in May; those numbers are due next week.