U.S. stocks closed out a second quarter that is consecutive sharp gains on Wednesday, but risks remain for shares because the looming U.S. presidential election and mounting coronavirus cases could make investors cautious.
The S&P 500 rose 8.5% for the quarter that is third although it fell 3.9% in September in its first monthly decline since March, once the coronavirus began its rapid spread across the United States.
Nevertheless, the index that is benchmark quarterly gain extended its nearly 20% rise in the next quarter, for its biggest two-quarter jump since 2009. U.S. stocks closed out a second quarter that is consecutive.
Hopes for an recovery that is economic historic stimulus from Washington and the Federal Reserve fueled the U.S. stock market’s rally following coronavirus-driven crash in March. But stocks have struggled because the market peaked on Sept. 2, with September marked by a sell-off in heavyweight shares that are technology-related.
“Looking ahead, what’s likely to be absolutely critical we going to visit a significant surge in situations?” stated Oliver Pursche, president and chief investment officer of Bronson Meadows Capital Management in Fairfield, Connecticut as we enter the colder months and traditional flu period is, Are.
The Nasdaq index that is composite 11% into the third quarter, and registered its biggest two-quarter increase since 2000. The Dow Jones average that is industrial up 7.6% for the quarter just ended.
Strategists stated many risks remain for stocks, such as the pandemic, the Nov. 3 election that is presidential the Supreme Court vacancy following Justice Ruth Bader Ginsburg’s death. Investors have worried that the election outcomes will possibly be uncertain or not accepted.
“People are going into the finish of the quarter with a bit of a wary, uncertain feeling,” said Michael James, managing manager of equity trading at Wedbush Securities in Los Angeles. “We not merely have a COVID that is still-unstable situation, you have the uncertainty of the election.”
The S&P 500 materials sector outperformed and led gains among S&P sectors for September, while the most sector that is heavily weighted technology, was among the weakest sectors for the month.
For the quarter, consumer discretionary, materials and industrials were top performers along side technology, while energy was the declining sector that is only.
Stocks continued to look more attractive compared with bonds.
The spread between the S&P 500 dividend yield additionally the 10-year U.S. Treasuries yield began to widen within the last few month after tightening for most of the quarter.
“The ‘value stocks’ – that is where the dividends are – have been underperforming,” Pursche said. “When you have underperformance in a sector that provides yields… you’re making it more appealing.”