The rise suggests investors see a recovery on the horizon.
Defying the coronavirus pandemic’s mounting human and economic toll, stocks closed Tuesday at a record high, bringing an end to the shortest bear market in U. S. history. After notching three consecutive weeks of gains, the Standard & Poor’s 500 index closed at 3,389, gaining 0.2 percent on the day. The finish capped a remarkable comeback from the March plunge that slashed 34 percent off the previous record, set Feb.19, as the pandemic tightened its grip on the country. Investors Tuesday brushed aside worries about the nation’s continuing struggle to contain the pandemic, focusing instead on signs of strength in the housing and retail sectors. Housing starts in July rose 22.6 percent to a seasonally adjusted annual rate of nearly 1.5 million, the Commerce Department said. Permits also rose sharply for both single- and multifamily dwellings. “One of the economy’s most important leading indicators is telling us that not only is the pandemic recession over, the economic outlook is actually growing brighter by the day,” Chris Rupkey, chief financial economist for MUFG Union Bank in New York, wrote in a note to clients. The pandemic, meanwhile, continues to stalk the $19 trillion U. S. economy. More than 5.4 million Americans have been infected by the coronavirus, and more than 171,000 have lost their lives, according to Johns Hopkins University. As in previous stock market rallies, the financial rewards of the latest surge have been highly uneven. Savvy investors have been showered with profits while millions of people without money to invest or even pay rent in the months ahead, have been left out. Only about half of Americans own stocks, mainly through retirement accounts, according to the Federal Reserve. “At the end of the day, the record is just a number,” said Wayne Wicker, chief investment officer at Vantagepoint Investment Advisers. But the rise in the stock market suggests that investors see a recovery on the horizon. “Although today’s economy remains in a miserable state in an absolute sense,” he said, “markets care about better or worse, not good or bad,” and the leading economic indicators continue to improve. The S&P 500’s milestone came one day after the tech-heavy Nasdaq posted its own record, drawing kudos on Twitter from President Trump. Before trading began Tuesday, Trump touted signs of economic recovery and took credit for the market upswing.
