Wall Street claws back last of pandemic losses as S&P finishes at record high

‘It’s hard to believe, but the 2020 bear market is officially over,’ says UBS Global Wealth Management’s Americas CIO Solita Marcelli

Wall Street has reclaimed the last of its losses from the sell-off caused by the coronavirus pandemic, as the S&P 500 closed the day at an all-time high.

The benchmark index finished with a gain of 0.2 per cent, to put it above the record set on 19 February, just before the pandemic shut down businesses worldwide and caused multiple countries’ economies to fall into recession.

The S&P 500 fell by 34 per cent earlier in the year, as businesses suffered amid the pandemic and the US saw record unemployment.

In response, the Federal Reserve and Congress provided aid to help kickstart the economy, and after a 51.5 per cent rally caused by a sustained increase in the price of stocks, the S&P 500 came close to beating the record set in February in the last few days.

During afternoon trading, the benchmark index was up 0.3 per cent at 3,392, which followed the pattern of the last week, where it looked set to top February’s record before easing later in the day, according to the Associated Press.

However, the index kept rising on Tuesday and at one point it rose above the all-time closing high of 3,386.15 set on 19 February, as it went above 3,393.52 for the first time in its history.

“It’s hard to believe, but the 2020 bear market is officially over,” wrote Solita Marcelli, UBS Global Wealth Management’s Americas CIO, in a note sent to her clients.

“This is bittersweet news for some investors, who had hoped for another opportunity to buy more stocks on another market decline. On the bright side, this new bull market still offers opportunities for investors,” Ms Marcelli added.

In a statement sent to CNN, Ryan Detrick, Chief Investment Strategist for LPL Financial, explained why the S&P 500 has seen a record rise, while the US is still struggling with the ongoing pandemic.

“Many continue to wonder why stocks are at new highs with 10 per cent unemployment and nearly a million people filing for initial unemployment claims,” he said. “The truth is economic data is backward looking and stocks are looking ahead to a much brighter future,” Mr Detrick added.

Also on Tuesday, the Dow Jones Industrial Average finished the day down 0.2 per cent, at 27,813, while the Nasdaq composite finished 0.8 per cent up, which was a record high for the index.