(Reuters) - The S&P 500 on Tuesday rose for an eighth straight session and was within striking distance of its February peak, a level last seen before the onset of the coronavirus crisis that caused one of Wall Street’s most dramatic crashes in history.
The benchmark index was about half a percent below the all-time high it hit on Feb. 19, when investors started dumping shares in anticipation of what proved to be the biggest slump in the U.S. economy since the Great Depression.
Ultra-low interest rates, trillions of dollars in stimulus and, more recently, a better-than-feared second-quarter earnings season have allowed all three of Wall Street’s main indexes to recover.
The tech-heavy Nasdaq has led the charge, boosted by "stay-at-home winners" Amazon.com Inc, Netflix Inc and Apple Inc. The index was down about 0.1%.
The blue-chip Dow surged 1%, coming within 5% of its February peak.
Value stocks have outperformed tech-focused growth stocks recently, reflecting market’s confidence in improving economic outlook. On Tuesday, the Russell 1000 value index rose 0.9%, while the Russell 1000 growth index edged up 0.1%.
“COVID-19 really turned the light switch off on the economy - it happened very quickly - and the hope is that by and large, once we get a vaccine and distribute it to the masses, that we turn the switch back on,” said John Petrides, portfolio manager at Tocqueville Asset Management in New York.
Aiding sentiment, President Vladimir Putin claimed Russia had become the first country in the world to grant regulatory approval to a COVID-19 vaccine. But the approval has concerned some experts as the vaccine still must complete final trials.
Investors are now hoping Republicans and Democrats will resolve their differences and agree on another relief program to support about 30 million unemployed Americans, as the battle with the virus outbreak was far from over with U.S. cases surpassing 5 million last week.
“The probability that fiscal and monetary stimulus will bridge the gap for the U.S. economy to reopen is going up, and that’s what markets like,” said Tim Shaler, chief economist for iTrustCapital in Newport Beach, California.
Also in focus are Sino-U.S. tensions ahead of high-stakes trade talks in the coming weekend.
Financials .SPSY and industrials .SPLRCI, which have lagged the benchmark index this year, provided the biggest boost to the S&P 500 on Tuesday as it eyes its longest streak of gains since April 2019.
At 12:41 a.m. ET, the S&P 500 was up 16.01 points, or 0.48%, at 3,376.48, about 17 points shy of its high of 3,393.52. The Dow Jones Industrial Average was up 270.59 points, or 0.97%, at 28,062.03, and the Nasdaq Composite was up 10.45 points, or 0.10%, at 10,978.81.
Airlines and cruise operators, which would benefit from a full reopening of the economy, traded higher. The NYSE Arca Airline index rose 4.9%, while Royal Caribbean Group, Norwegian Cruise Line Holdings Ltd and Carnival Corp gained between 4% and 6.5%.
Advancing issues outnumbered decliners by a 2.13-to-1 ratio on the NYSE and by a 1.56-to-1 ratio on the Nasdaq.
The S&P index recorded 41 new 52-week highs and no new low, while the Nasdaq recorded 82 new highs and nine new lows.
Reporting by Medha Singh and Ambar Warrick in Bengaluru; Additional reporting by Sruthi Shankar; Editing by Shounak Dasgupta and Anil D'Silva