US stocks opened about 800 points higher Tuesday, buoyed by reports that the rate of new coronavirus infections may be flattening and suggesting the worst of the pandemic may be over.
In early trading, the Dow Jones Industrial Average gave back some early gains, but remained up 571.08 points, or 2.51 percent, to 23,244.05. The S&P 500 rose 2.06 percent. The Nasdaq Composite climbed 1.26 percent.
“Investors chose to accentuate the positive, as they have been mostly doing since the bear-market low,” Ed Yardeni, chief investment strategist at Yardeni Research, said in a note to clients. “In our opinion, we are in the mist of a great rebalancing away from bonds and into stocks.”
“The apex in New York State is likely imminent as opposed to one month out,” Marko Kolanovic, JP Morgan’s global head of marcro quantitative and derivatives strategy, said in a research note. “Big data indicated very early that social distancing is working overall.”
On Monday, the Dow rocketed 1,600 points, its third-largest point gain in history. The S&P 500 rose 7 percent to its highest level since March 13.
New York Gov Andrew Cuomo said Monday the number of deaths each day from the coronavirus had been “effectively flat” for the two days. New York is one of the hardest hit states.
In Europe, Italy and Spain said new infections have slowed after vigorous containment measures were imposed.
Sectors hit hard by COVID-19 rallied Tuesday.
Royal Caribbean, Norwegian Cruise Line and Carnival climbed about 20 percent in early trading. United Airlines and MGM Resorts gained about 14 percent.
Darden Restaurants, operator of Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen, The Capital Grille and other brands, rallied about 18 percent after the company said it had not dipped into its revolving credit agreement.
Some investors sold government bonds, underscoring a willingness to accept increased risk for greater return in stocks. The yield on the 10-year Treasury note edged up to 0.758 percent after Tuesday’s opening from 0.675 percent Monday. Yields rise as bond prices decline.
The price of oil, a proxy for future economic activity, was mixed Tuesday.
West Texas Intermediate crude rose 0.84 percent to $26.31 a barrel. Brent Crude, the worldwide benchmark, slipped 0.09 percent to $32.99.