Asian shares extend rally; S&P 500 within 1% of record

FILE - People walk by the New York Stock Exchange, left, Tuesday, July 21, 2020.  Wall Street is drifting in early trading on Monday, Aug. 10,  after President Donald Trump announced several stopgap moves to aid the economy.   (AP Photo/Mark Lennihan)
FILE - People walk by the New York Stock Exchange, left, Tuesday, July 21, 2020. Wall Street is drifting in early trading on Monday, Aug. 10, after President Donald Trump announced several stopgap moves to aid the economy. (AP Photo/Mark Lennihan) (Copyright 2020 The Associated Press. All rights reserved)

Shares advanced in Asia on Tuesday, extending another rally that took the S&P 500 to within striking distance of its all-time high set in February.

Japan’s Nikkei 225 added 1.6% and Hong Kong gained more than 2% in early trading, even as the tally of confirmed new coronavirus cases worldwide topped 20 million, according to a tally by Johns Hopkins University.

The gains followed President Donald Trump’s announcement over the weekend of stopgap moves to aid the economy, after talks on Capitol Hill for a bigger rescue package faltered.

Sentiment got an extra boost from signals that the talks might resume, and by Trump's suggestion to reporters that he is planning a capital gains tax cut and a tax reduction also for “middle income" earners.

The Hang Seng in Hong Kong added 2.1% to 24,877.14, while the Nikkei 225 climbed to 22,686.53. In South Korea, the Kospi picked up 1.3% to 2,418.91. Sydney's S&P/ASX 200 jumped 0.9% to 6,167.10 and the Shanghai Composite index climbed 0.7% to 3,402.44.

Overnight, the S&P 500 rose 0.3%, to 3,360.47, after wavering between small gains and losses. The benchmark index is now within 1% of its last record high.

The Dow Jones Industrial Average rose 1.3% to 27,791.44. The Nasdaq composite lost 0.4%, to 10,968.36.

Trump signed executive orders over the weekend to extend an expired benefit for unemployed workers, among other things. The orders were more limited than what investors hoped to see from a full rescue bill for the economy, but hopes remain that the White House and Congress will eventually reach a compromise.