S&P 500 erases 2020 losses

The S&P 500 on Monday erased its losses for 2020, accentuating a remarkable stock market comeback that some critics say is disconnected with the economic pain continuing in the real economy.

With a 27-point, or 0.8 percent, increase, the S&P 500 closed at 3,252, above the 3,230 level where it closed at the end of 2019.

Meanwhile, the Dow Jones Industrial Average was flat with a gain of 9 points, or 0 percent, while the tech-heavy Nasdaq composite gained 264 points, or 2.5 percent, outperforming broader indexes.

While markets remain below their February peaks, the recovery of 2020 losses for the S&P is a notable milestone. Its gains in the first two months of the year were only 4 percent higher than its current level.

But the economy continues to struggle under the weight of the pandemic. Unemployment is at 11.1 percent, higher than its Great Recession peak, and consumer sentiment and sales remain well below their pre-coronavirus levels.

Some market watchers worry the high stock prices are a bubble created by low interest rates and a slew of rescue programs from the Federal Reserve. 

Recent resurgences of the virus in large states such as California, Texas and Florida have only added to the concern that the economic recovery will be slow, and that the market prices are artificially high.