Wall Street closes out its 5th straight quarterly gain

Wall Street closed out its fifth straight quarterly gain Wednesday, continuing its comeback from a steep drop in early 2020 at the onset of the COVID-19 pandemic.

The Standard & Poor’s 500 index edged up 0.1%, bringing its advance for the last three months to 8.2% and for the first half of the year to 14.4%. The benchmark index finished June with a 2.2% gain and its third straight all-time high as it extended its winning streak to a fifth day.

Stocks have been pushing higher on optimism that the economy is strengthening and that the Federal Reserve will keep interest rates low for a while longer.

Meanwhile, concerns about inflation this year have dissipated somewhat, as investors have become increasingly convinced that the rise in prices for a wide variety of products — including food, oil and lumber — is temporary and a result of the U.S. economy recovering from the pandemic.

Trading Wednesday was relatively subdued as investors wait for the government’s monthly jobs report due out Friday.

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June 30, 2021

The S&P 500 rose 5.70 points to 4,297.50. The Dow Jones industrial average added 210.22 points, or 0.6%, to end at 34,502.51. The Nasdaq composite fell 24.38 points, or 0.2%, to 14,503.95. The tech-heavy index hit record highs Monday and Tuesday.

The Russell 2000 index of small-company stocks rose 1.71 points, or 0.1%, to 2,310.55.

Many professional investors on Wall Street say stocks can keep rising, just not as much as they did during the first half of the year.

Interest rates remain low, even if the Federal Reserve recently indicated it could start raising rates in about two years. And with the economy continuing to strengthen, supporters say stocks should be able to tick higher even if their prices have climbed faster than corporate profits and look expensive compared with history.

At the Wells Fargo Investment Institute, for example, the forecast is for record corporate earnings this year to help the S&P 500 rise to between 4,400 and 4,600 by the end of 2021. That would mean a gain of 2.4% to 7% from the index’s current level of 4,297.50.

Some are more pessimistic, though, amid concerns that several measures of growth in the economy have already hit their peak.

So far this year, energy stocks continue to lead the way higher among the 11 sectors in the S&P 500 with a gain of 42.4%. Financials are the next-biggest gainer, up 24.5%, while real estate companies are up 21.7%. Technology companies, the biggest gainers in 2020, are up 13.2%. Utilities lag behind the rest of the market through the first half of this year with a gain of 0.8%.

As inflation concerns have receded through much of the quarter, that’s helped push solid gains for technology companies. Tech stocks were the biggest gainers in the S&P 500 in the second quarter with a 12.9% rise. The sector is viewed as a high-growth area of the market, which tends to do better when inflation is low.

Meanwhile, some rising concerns over COVID-19 variants also prompted investors to put more money into the sector, which did particularly well during the height of the pandemic.

For the April-to-June quarter, American Express led the way higher among the 30 stocks in the Dow with a 17.8% gain. Goldman Sachs was a close second with a 16.1% advance. Intel fared the worst, losing 12.3%.

Industrial, financial and energy companies were among the winners Wednesday. Those gains were kept in check by a pullback in technology, communication and real estate stocks.

Treasury yields mostly fell. The yield on the 10-year Treasury note fell to 1.47% from 1.48% late Tuesday.

Crop prices rose after the government reported that U.S. farmers planted fewer acres of corn and soybeans than had been expected.

Investors got another dose of good economic news Wednesday when payroll processor ADP said the private sector created 692,000 jobs last month, which topped economists’ forecasts. The big jobs data point will come Friday, when the government’s monthly jobs report is released. Economists are expecting that employers created 675,000 jobs last month and the unemployment rate fell to 5.7%.

Didi Global, a Chinese ride-hailing service, rose 1% in its U.S. stock market debut. The company’s initial public offering of 288 million shares was priced at $14 a share.