(Reuters) – The top three Wall Street indices rose on Tuesday, improving economic data and the prospect of further stimulus boosting hopes for a rapid recovery as a surge in tech stocks boosted the Nasdaq to a new record.
White House counselor Larry Kudlow said tax cuts and direct mail checks are on the table in the next Coronavirus Relief Bill.
The Nasdaq hit a fifth record this month with Apple Inc (AAPL.O) providing the biggest boost after at least three brokerages raised their price targets, a day after the iPhone maker said it would use its own chips for Mac computers.
The pace of contraction in the US manufacturing and services sectors slowed in June, as companies reopened after the health crisis led to a freeze in mid-March.
Another set of data showed that sales of new homes jumped 16.6% in May, blowing previous estimates up 2.9%.
“There is a lot of money on the sidelines and as the country reopens, as the economy recovers, that money will be reintroduced,” said Thomas Hayes, managing member of Great Hill Capital LLC in New York.
Global stock markets were also boosted by President Donald Trump’s assurance that the Phase 1 trade deal with China was “fully intact” after Councilor Peter Navarro confused by saying the deal was over .
While tensions between the United States and China have been a concern, monetary and budgetary support worth thousands of billions of dollars has partially fueled the S&P 500 .SPX benchmark, with a index about 7% below its record level of February 19.
“The market is overbought, but it continues to grow and the Fed continues to support,” said Peter Cardillo, chief economist at Spartan Capital Securities in New York.
Nine of the top 11 sub-indexes were higher, with technology and consumer discretionary posting the largest gains. Defensive real estate .SPLRCR and utilities .SPLRCU were slightly lower.
At 11:39 am ET, the Dow Jones Industrial Average .DJI was up 238.16 points, or 0.92%, to 26,263.12, the S&P 500 .SPX was up 31.06 points, or 1.00% , at 3148.92. The Nasdaq Composite .IXIC rose 126.22 points, or 1.26%, to 10,182.70.
Nike Inc (NKE.N) rose 2% as brokerages raised their price targets ahead of Thursday’s quarterly results.
Boeing Co’s (TO PROHIBIT) best supplier Spirit AeroSystems Holdings (SPR.N) fell 5.8% after declaring that it was seeking relief from lenders, its finances being stretched by the COVID-19 pandemic and the cessation of production of the 737 MAX.
Micron Technology Inc (MU.O) was down 2.6% as BMO downgraded the chipmaker’s stocks for “market performance”.
The growing problems outnumbered the declines by a ratio of 1.87: 1 on the NYSE and a ratio of 1.68: 1 on the Nasdaq.
The S&P index recorded 23 new highs over 52 weeks and no new lows, while the Nasdaq recorded 124 new highs and six new lows.