US equities post weekly gains as economy reopening in focus

New York, May 31 (SocialNews.XYZ) US equities posted solid gains during the holiday-shortened week, as investors weighed the possibility of normalizing economic activities.

For the week ending Friday, the Dow advanced 3.8 per cent, the S&P 500 gained 3 percent, and the Nasdaq was up 1.8 per cent. US markets were closed Monday in observance of Memorial Day, Xinhua news agency reported on Saturday.

The S&P US Listed China 50 index, which is designed to track the performance of the 50 largest Chinese companies listed on US exchanges by total market cap, logged a weekly gain of 5.2 per cent.

For the month of May, the Dow notched a 4.3 per cent rise, the S&P 500 climbed 4.5 per cent, and the tech-heavy Nasdaq marked a 6.8 per cent return.

"The bottom line is that the worst of the economic crisis may be over - which may help explain the ongoing stock market rally - but no one can know for sure at what pace the economy is likely to recover from here," analysts at Zacks Investment Management said in a note on Saturday.

All 50 US states have eased COVID-19 restrictions to varying degrees, despite fears of a re-acceleration in virus cases.

Signs of life are starting to appear again across the United States, however, the return of economic activity is happening at a much slower pace so far, and plenty of weakness remains - retail sales data for April showed steep declines, and Americans are still losing jobs, albeit at an increasingly slower pace, noted analysts at Zacks Investment Management.

Multiple data released lately showed the pandemic has severely crippled the US economy.

US personal consumption expenditures (PCE) nosedived 13.6 per cent in April month on month amid widespread shutdowns triggered by the COVID-19 outbreak, the US Commerce Department reported on Friday.

The plunge, following a revised 6.9 per cent drop in March, has been the sharpest drop in government records since six decades ago, according to the report released by the department's Bureau of Economic Analysis.

The PCE data came one day after the Commerce Department revised down gross domestic product in the first quarter to a 5.0 per cent annualized contraction in a second estimate, 0.2 percentage point lower than the advance estimate in April.

Meanwhile, US initial jobless claims registered 2.123 million in the week ending May 23, the Department of Labor reported Thursday. Over the past 10 weeks, more than 40 million Americans have filed for unemployment insurance.

Wall Street also paid close attention to the latest comments from U.S. Federal Reserve Chairman Jerome Powell.

At a virtual event held by Princeton University on Friday, Powell said he is concerned about a potential second wave of outbreak. "I think a second wave could be what would really undermine public confidence and might make for a significantly longer recovery, weaker recovery."

As of Saturday afternoon, more than 1.76 million confirmed COVID-19 cases have been reported in the United States, with over 103,000 deaths, according to the Center for Systems Science and Engineering at Johns Hopkins University.

Source: IANS