Asian shares rise as Wall Street gains for 3rd straight day
TOKYO (AP) — Asian shares rose Wednesday after Wall Street extended its gains for the third straight day, driven by optimism over economies reopening from shutdowns to stem the coronavirus pandemic.
Japan’s benchmark Nikkei 225 gained 1.1% to 22,581.19 in morning trading. Australia’s S&P/ASX 200 rose 0.8% to 5,882.60. South Korea’s Kospi surged 2.6% to 2,141.28.
Australia’s S&P/ASX 200 gained 1% to 5,894.00. Hong Kong’s Hang Seng was up 1.1% at 24,258.49, while the Shanghai Composite added 0.4% to 2,931.90.
“The theme of reopening optimism has its stronghold on markets going into the midweek, one to likewise inspire Asia markets gains despite the series of ongoing concerns,” said Jingyi Pan, market strategist for IG in Singapore.
Among such concerns are the future of the two major economies of the world, China and the U.S and whether widespread protests in the U.S. will set off another rise in COVID-19 cases.
On Wall Street, the S&P 500 closed 0.8% higher, at 3,080.82, after wavering throughout the morning. Technology, industrial and health care sector stocks accounted for a big slice of the gains. Energy stocks far outpaced the rest of the market as the price of crude rose ahead of a meeting of major oil producers. Bond yields climbed, another sign of ebbing pessimism among investors.
So far, Wall Street’s momentum has not been derailed by the wave of daily unrest across the U.S. that began last week in Minneapolis as a protest over police brutality. Cities across the country have been rocked by violence and destruction for seven days in a row, drawing threats from the White House to send troops in to put down the unrest.
“The market action seems to have a lot more to do with people’s confidence about the economic reopening,” said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management. “It’s happening irrespective to what we’re seeing socially across the country right now.”
The Dow Jones Industrial Average rose 1.1% to 25,742.65. The Nasdaq composite, which is heavily weighted with technology companies, added 0.6%, to 9,608.37 after dipping as much as 0.8%.
Smaller company stocks had some of the biggest gains. The Russell 2000 index picked up 0.9%, to 1,418.21.
NASA astronauts launched into space by SpaceX on Saturday rang the opening bell from the International Space Station early Tuesday to kick off trading on the Nasdaq.
Stocks have now recouped most of their losses after the initial economic fallout from the coronavirus knocked the market into a staggering 34% skid in February and March. The S&P 500 is now down 9% from its all-time high in February.
Investors are hoping that the worst of the recession has already passed, or will soon, as governments around the country and around the world slowly lift the restrictions that left broad swaths of the U.S. economy at a standstill beginning in March.
While more countries and sectors are reopening, economic activity is expected to remain subdued as social distancing rules complicate plans to get back to business. Meanwhile, investors continue to keep an eye out for any signs that the reopening of the economy is leading to a resurgence in COVID-19 cases.
In Japan, Tokyo reported 34 newly confirmed cases on Tuesday, leading city officials to declare a largely symbolic “alert” for more social distancing. The Rainbow Bridge in Tokyo was lit red to remind residents. Before Tuesday, daily new infections had dropped below 20 recently.
Bond yields were mostly higher. The yield on the 10-year Treasury rose to 0.71% from 0.68% late Tuesday.
Benchmark U.S. crude added 76 cents to $37.57 a barrel. It rose $1.37 to $36.81 a barrel on Tuesday. Brent crude oil for August delivery gained 54 cents to $40.11 a barrel.
The balance of this week will provide new data on the labor market, which has racked up huge increases in Americans who’ve lost their job as the coronavirus shutdowns left millions out of work.
Payroll processor ADP issues its May survey of hiring by private U.S. companies on Wednesday. The weekly tally of applications for unemployment aid comes on Thursday. And on Friday, the government reports its May labor market data. Analysts surveyed by FactSet expect the report will show the economy lost 9 million jobs last month and that the national unemployment rate jumped to nearly 20%.
Investors will also have their eye on a couple of companies set to go public this week. Music company Warner Music Group is set to hold its IPO on Wednesday, while business information services company ZoomInfo Technologies is scheduled to go public on Thursday.
The U.S. dollar slipped to 108.62 Japanese yen from 108.67 yen late Tuesday. The euro climbed to $1.1200 from $1.1171.
AP Business Writer Alex Veiga contributed.