Pedestrians wearing protective masks during the coronavirus pandemic pass by the New York Stock Exchange in New York. (AP Photo / Frank Franklin II)

Stocks open higher, pushing S&P 500 closer to record high

Stocks are opening higher on Wall Street Wednesday, bouncing back from a late slide a day earlier that broke a seven-day winning streak for the S&P 500. The index was up about 1% in the early going, edging it closer to the record high it reached in February. Technology companies and banks were doing especially well as the day got going, and energy companies were also higher following an uptick in the price of oil. Electric car maker Tesla jumped after saying it would do a 5-for-1 stock split, making its shares more affordable following a giant run-up this year.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story appears below.

World stock markets turned higher on Wednesday though market sentiment appears fragile due to a lack of progress in U.S. talks on more economic aid.

Wall Street appeared set to open higher after closing lower the previous day, with Dow futures 0.8% higher and those for the S&P 500 gaining 0.7%.

In Europe, Britain’s FTSE 100 gained 1.2% to 6,228 after official data showed the country’s economy contracted by a record 20.4% quarter-on-quarter in April-June, more than any other wealthy country, as a result of pandemic lockdown measures.

Britain imposed restrictions on business and public life later than most other countries, meaning it coincided more closely with the second quarter. But the figures for June show a rebound already, which may have encouraged some investors.

The CAC 40 in Paris edged 0.4% higher, to 5,047 and Germany’s DAX slipped 0.1% to 12,933.

Concerns over fresh waves of new coronavirus infections are gaining traction with a resurgence of cases in Germany and other European countries.

Germany has been lauded for keeping the pandemic under control for a long time, but the easing of measures and the return of travellers have in recent weeks lead to an uptick of infections.

In Asian trading, Tokyo’s Nikkei 225 gained 0.4% to 22,843.96, while Hong Kong’s Hang Seng rebounded from early losses, surging 1.4% to 24,228.10. In South Korea, the Kospi gained 0.6% in a late comeback, closing at 2,432.35. The Shanghai Composite index lost 0.6% to 3,319.27. Australia’s S&P/ASX 200 declined 0.1% to 6,132.00.

A discouraging lack of progress on talks between Congress and the White House over more economic aid for the U.S. economy has dogged trading this week, analysts said.

“When you walk back the market’s expectations of an imminent fiscal deal, it is like poking the balloon with a straight pin as all semblance of near-term optimism gets immediately deflated,” Stephen Innes of AxiCorp. said in a commentary.

The S&P 500 is within 2% of the all-time high it set in February. The stunning turnaround from a nearly 34% tumble in March, when the coronavirus pandemic sent stocks into a nosedive, shows investors gaining confidence from improved economic data and better-than-expected second-quarter corporate results.

Stocks are attractive compared with other assets thanks partly to unprecedented actions by the Federal Reserve and other central banks to stabilize markets by cutting interest rates and ramping up bond purchases.

Hopes are rising that the many pharmaceutical companies working on ways to treat COVID-19 will deliver a working vaccine in the coming months.

The yield on the 10-year Treasury rose to 0.67% from 0.57% late Monday, a big move.

The price of gold, which recently surpassed $2,000 per ounce for the first time, bounced back after dropping nearly $60 earlier in the day. It gained $3.00 to $1,943.30 per ounce.

Benchmark U.S. crude oil for September delivery gained 60 cents to $42.21 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude oil for October delivery picked up 59 cents to $45.09 per barrel.

In currency dealings, the dollar bought 106.96 Japanese yen, up from 106.51 yen late Tuesday. The euro rose to $1.1764 from $1.1744.

The Associated Press

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