US stocks point to coming bull market

United States markets soared as signs of a quick economic recovery emerged. On Monday, the Nasdaq posted a record closing high, becoming the first of the major indexes to confirm a new bull market. At the same time, the S&P 500 ended in positive territory for the year as expectations for a swift recovery from a coronavirus-driven downturn increased.

The Dow Jones Industrial Average rose 461.46 points, or 1.7 percent, to 27,572.44. The S&P 500 – a widely used gauge of US retirement and college savings accounts – gained 1.20 percent to end the day at 3,232.39. Meanwhile, the tech-heavy Nasdaq Composite rose 1.13 percent.

Rising technology and communication stocks have driven gains in the Nasdaq, which confirmed a new bull market just 16 weeks after coronavirus fears crushed stocks and pushed the US economy into recession.

The Nasdaq has climbed 44.7 percent from its March 23 bottom. A bull market is confirmed once the index makes a new high and is considered to have begun at the index’s low, according to a widely accepted definition.

The S&P 500 remains about 4.5 percent below its record high close, while the Dow Jones Industrial Average is about 6.7 percent below its record close.

A closely watched monthly jobs report on Friday showed an unexpected fall in the unemployment rate, bolstering views that the worst of the economic damage from the virus outbreak could be over.

“It’s optimism surrounding the reopening of the global economy, and the likely confirmation that the US economy will experience a V-shaped recovery in the second half,” said Sam Stovall, chief investment strategist at CFRA Research in New York.

Stocks added to gains late in the session after the US Federal Reserve eased the terms of its “Main Street” lending programme.

The energy sector climbed the most among the 11 major S&P sectors, rising 4.3 percent, as major oil producers agreed over the weekend to extend a deal on record output cuts.

Beaten-down shares of cruise operators Carnival Corp and Norwegian Cruise Line Holdings Ltd continued to recover. The S&P 1500 airlines index jumped 9.9 percent.

Investors will be closing watching this week’s two-day Fed policy meeting, which ends Wednesday. The jobs report will most likely be discussed at the meeting.

It would be the first meeting since April when Fed Chairman Jerome Powell said the US economy could feel the weight of the economic shutdown for more than a year.