Market Recap: Wednesday, June 3

Stocks rallied on Wednesday, with benchmarks notching four consecutive days of gains, as investors bet on more U.S cities planning to reopen businesses in the near-term as the coronavirus pandemic eased.

Video transcript

SEANA SMITH: We're just a few seconds away from the closing bell on Wall Street. And we have a rally on our hands today. The Dow still up over 500 points. That's good for a 2% gain here for the Dow this afternoon. S&P and NASDAQ also holding onto pretty substantial gains.

The S&P up just over 1% and the NASDAQ up just around 7/10 of a percent. Leadership-wise in the sectors, we're continuing to see a similar story. Industrials continuing to be a leader today and then also financials-- some of those big bank names. Names like--

[BELL RINGING]

[POUNDING]

And that wraps it up for today's trading day. Again, substantial gains. The Dow up over 500 points. S&P and NASDAQ holding onto gains. It's really interesting when you take a look at the market, you have no idea about what's going on on Main Street and the protest that we're seeing played out. Nationwide, we have stocks not far from their highest levels that we have seen in just a couple of months.

The NASDAQ-- I mentioned some of the outperformance that we are seeing in the tech needs. The NASDAQ 100 is less than 1% from its record high set back in the middle of February. Sectors, industrials carrying the gains today, then also financials. Names, like Wells Fargo, JP Morgan, City amongst the biggest gainers in the day.

I want to bring in my co-host Myles Udland here for the hour. And Myes, we talked about this a little bit in the 3:00 PM. But this risk on trade that we're seeing-- small caps, and more cyclical sectors, like industrials, continuing to outperform.

MYLES UDLAND: Yeah, and I think that the rotation continues to kind of back up this idea that the market is getting a bit more healthy over time, right? We've seen these growthy names, the FANG names, were kind of the first movers as we move off those March 23rd lows. But you can't have a sustained market rally unless you get some of that rotation. Maybe not a permanent shift. It's not like we have to all of a sudden have value way outperforming.

But you can't have entire parts of the market completely left behind. And we saw it happen a little bit last week and really over the last couple of weeks. And today, another session in which I keep coming back to financials just because of kind of where they sit in the economy-- what they say about the health of the economy. They're waiting in the market.

XLF up 3.8% today. KBW Bank index up about 5%. And the more financials kind of repair the damage that was done to them during the sell-off, I think the more encouraged investors are going to continue to grow with this rally.

SEANA SMITH: Yeah, I certainly do agree with that. And Rick Newman, just to bring you into the conversation. It's interesting because we got some of this econ data out this morning. And take a look at the ADP report, for example. US employers cutting 2.8 million private sector jobs in the month of May alone.

If there was any other time, really, I think in history, you would say, hey, that's pretty concerning. But it was actually much better than what the Street was anticipating. So the market's actually taking that 2.8 million job loss as good news today.

RICK NEWMAN: Right, so we got a small disaster instead of a big disaster. I thought the market was looking completely past all the economic data for about the next month because we know it's all going to be terrible. But I guess less bad is a new trigger for markets. I mean, Myles, you know, the other sector that's being-- that is actually being completely left out of what's going on the market is small business.

I mean, we're basically seeing carnage among small businesses. I mean, they are dying. But that I guess it's not-- I guess the stock market-- I'm still puzzling this out. I guess the stock market does not care about small businesses. I realize they're not represented in the indexes for the most part until you get to the Russell, not only public companies. But, I mean, this is going to affect bigger businesses at some point. I guess just not now.

MYLES UDLAND: Well, I think to that point, though, Rick, obviously yes. The composition of the S&P 500 doesn't explicitly account for the health of small business. But implicit in what the market has done, at least, in my view is a sense that there won't be some disaster in DC where we don't get an additional stimulus measure passed.

I mean, we have enhanced unemployment running out at the end of July. You know, we have the first batch of PPP loans ready to kind of begin a repayment schedule. And I think a lot of these things are going to have to be addressed. But as you know, in politics time, seven weeks is a lifetime. And there's different issues happening in DC right now.

The market, I think, is saying, we don't think Congress is going to screw this up. They haven't screwed it up yet. They've been very swift in their response. The Fed is on board. Stephen Mnuchin and Jay Powell are seeing eye to eye on this. And I think Mnuchin pretty much has, Mitch McConnell's ear as well as anyone's going to have that.

So the market doesn't think that's going to get screwed up. And, I mean, you know, we both know how quickly that could go south. But the market doesn't think, at least, right now that that's going to happen.

RICK NEWMAN: The market, you're right. But what's the market basically is pricing in everything going right from here on out. Also, the coronavirus has to pay attention and go away. It cannot resurface at Disney World or Disneyland this summer. The market is betting that will not happen as well and that reopenings are going to go smoothly. I'm not buying it. But, you know, the market has been smarter than me before.

SEANA SMITH: Yeah, and Rick, I think that's interesting, because a lot of this is banked on the fact that we don't see a second wave. When we've talked to so many doctor-- we're going to talk to another one here in just a minute. But we talked with so many doctors. And they're saying that, hey, that's still a real risk out there yet. Investors keep being able to kind of push that into the back of their mind and look forward.

We were talking to a couple of analysts here on "The Final Round." And they were saying, I think it was Sam Stovall, who said that he hasn't seen, at least, in his from what he can remember that investors are taking such a long-term view. They're looking at a couple of years at this point. And that's what's really he said is helping to justify this move we have seen in the market lately--