Wall Street surges, led by energy and materials
Wall Street surged on Tuesday, with the Dow Jones Industrial Average ending more than 2% higher as investors bought energy and materials stocks and looked beyond a recent rise in coronavirus cases.
The S&P 500 energy, materials and industrial indexes jumped more than 2%, while health, technology and consumer staples each rose more than 1%.
Amazon slipped 0.6%. It and other recently strong performing technology and growth stocks, including Facebook and Netflix, recovered from deeper losses, giving the Nasdaq a last minute spurt.
“Today is counterintuitive. We are reading about California’s economy shutting down and a record spike in cases in Florida, and yet you have energy stocks leading,” said Bob Shea, chief executive officer at TrimTabs Asset Management in New York. “We’re seeing a mini-rotation into value.”
JPMorgan Chase & Co, the largest U.S. lender, rose 0.6% after it posted a smaller-than-expected 51% drop in second-quarter profit.
Wells Fargo & Co tumbled 4.6% after booking a quarterly lo
The S&P 500 banks index dropped 1.2% as the three banks set aside a combined $28 billion to cover potential losses on loans to borrowers hurt by the coronavirus pandemic.
Wall Street has reclaimed most of its coronavirus-driven losses since March as a raft of monetary and fiscal stimulus and upbeat economic data raised hopes of a swift post-pandemic recovery.
But a recent record surge in COVID-19 cases and new business restrictions, particularly in California, has again raised uncertainty about how it may take for the economy to recover.
Alabama, Florida and North Carolina reported record daily increases in COVID-19 deaths on Tuesday.
Investors are bracing for what could be the sharpest drop in quarterly earnings for S&P 500 firms since the 2008 financial crisis, according to Refinitiv IBES data.
The Dow Jones Industrial Average surged 2.13% to end at 26,642.59 points, while the S&P 500 gained 1.34% to 3,197.52.
The Nasdaq Composite added 0.94% to 10,488.58.
Delta Air Lines Inc dropped 2.65% after it warned it will be more than two years before the industry sees a sustainable recovery from the “staggering” impact of the coronavirus pandemic, with demand largely tracking the curve of infections in different places.
Moderna Inc jumped 4.5% after it said it plans to start a late-stage clinical trial for its COVID-19 vaccine candidate on or around July 27.
Advancing issues outnumbered declining ones on the NYSE by a 1.92-to-1 ratio; on Nasdaq, a 1.63-to-1 ratio favored advancers.
The S&P 500 posted seven new 52-week highs and no new lows; the Nasdaq Composite recorded 35 new highs and 31 new lows.
Volume on U.S. exchanges was 10.7 billion shares, compared with the 11.8 billion average for the full session over the last 20 trading days.