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Stocks soar on growing economic optimism

Video Credit: Reuters Studio
Published on May 27, 2020 - Duration: 02:00s

Stocks soar on growing economic optimism

Wall Street rose sharply on Wednesday, powered by bank and retail shares, as the further easing of lockdowns boosted hopes for an economic recovery.

Conway G.

Gittens has the market action.

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Stocks soar on growing economic optimism

The stock market powered ahead Wednesday amid more concrete steps to bring America out of the great shut in.

The Dow settled above the 25,000 mark for the first time since early March.

It was the S&P 500's first close above the key 3,000 level since March 5th.

And the Nasdaq turned it around late in the day to also finish higher.

Plans for recreational re-openings are fueling optimism about an economic comeback... But the real catalyst for the market's recent rebound are the pledges by global central banks to do whatever it takes to prop up their economies, says Spartan Capital Securities chief market economist Peter Cardillo.

"The European Union proposed a $821 billion stimulus package which would be a unifying bond by the way and of course the Japanese are preparing to stimulate with massive amounts of money, and of course here in the States, and that's the reason why we have a stock market that's defying the fundamentals at this time." Investors, however believe the prospects for the economy are improving.... The Las Vegas strip has been given the green light by Nevada's governor to reopen next week... And Walt Disney announced plans to re-open Florida's Disney World in July... With states relaxing shelter-in-place orders, investors bet there is pent up consumer demand for shopping.

Shares of retailers closed during the shutdown rallied the most.

Macy's jumped nearly 20 percent in one day.

Gap Inc.

Was up more than 18 percent.

And banks were another major force in Wednesday rally.

Wall Street is betting the group will benefit from a pickup in economic activity.

Citigroup led the pack with an 8-1/2 percent surge on Wednesday, Bank of America and Morgan Stanley were up 7 percent.

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