(Reuters) – Wall Street’s main indexes gained on Tuesday as healthcare stocks rallied, oil prices surged and a number of countries and U.S. states eased coronavirus-induced restrictions in an attempt to revive their economies.
Stocks pulled back sharply late in the session after Federal Reserve Vice Chair Richard Clarida made downbeat comments about the depth of the economic contraction.
Some hard-hit countries, including Italy, as well some U.S. states including California are tentatively easing lockdown orders this week, raising hopes for a recovery in oil demand.
“We are starting to see some states open up, we are starting to see some activity,” said Paul Nolte, portfolio manager at Kingsview Investment Management. “We are probably now in the midst of the worst period and things will be gradually improving from here.”
The Dow Jones Industrial Average .DJI rose 133.33 points, or 0.56%, to 23,883.09, the S&P 500 .SPX gained 25.7 points, or 0.90%, to 2,868.44 and the Nasdaq Composite .IXIC added 98.41 points, or 1.13%, to 8,809.12.
Pfizer (PFE.N) shares rose 2.4% after the drugmaker said it and its German partner had begun delivering doses of an experimental coronavirus vaccines for human testing. Regeneron Pharmaceuticals (REGN.O) shares gained 6.0% after the company said its experimental antibody cocktail for COVID-19 may be available for use by the end of summer.
Stocks have rebounded sharply since late March from the coronavirus-fueled sell-off, helped by massive monetary and fiscal stimulus. Investors are now watching efforts by a number of states trying to spark their economies by easing restrictions put in place to fight the outbreak.
Clarida said during an interview with CNBC that the U.S. economy is likely to contract sharply during the second quarter as a result of intentional business shutdowns, but there is a chance the recovery could start in the second half of the year.
“Clarida threw a bit of a wet blanket on the market at the end of the session,” said Michael Antonelli, market strategist at Robert W. Baird in Milwaukee.
Data on Tuesday showed the vast U.S. services sector fell into contraction in April for the first time in nearly 10-1/2-years.
Investors are now bracing for data on the labor market through the week culminating with the employment report for the month of April due Friday.
“We have certainly gotten some negative data, but for the most part the market has learned to look through that,” said Kristina Hooper, chief global market strategist at Invesco.
In corporate news, shares of Norwegian Cruise Line Holdings Ltd (NCLH.N) tumbled 22.6% as the world’s third-largest cruise operator raised doubts about its ability to keep running as a business.