Dow jumps 1.6%, leads Wall Street higher
(Reuters) – Wall Street rose on Tuesday, led by energy and materials, as investors looked beyond a recent surge in coronavirus cases and rotated out Amazon and other recent strong performers.
The S&P 500 energy, materials industrial, health and consumer staples indexes all jumped more than 1%.
Limiting gains in the Nasdaq and S&P 500, Amazon fell 1.1%, extending a rotation that began Monday out of many big-name technology and momentum stocks that have led much of the U.S. stock market’s rebound since March.
“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 0.3% after it posted a smaller-than-expected 51% drop in second-quarter profit.
Wells Fargo & Co tumbled 5.3% after booking a quarterly loss for the first time since the 2008 financial crisis. Citigroup Inc dropped 3.6% as it reported a steep fall in quarterly profit.
The S&P 500 banks index slumped 1.6% 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.
Facebook, Netflix and Alphabet each fell less than 1% while Apple climbed 1.1%.
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.
At 2:33 p.m. ET (1833 GMT), the Dow Jones Industrial Average was up 1.61% at 26,506.74 points, while the S&P 500 gained 0.81% to 3,180.87.
The Nasdaq Composite added 0.35% to 10,427.65.
Delta Air Lines Inc fell 2.1% 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% 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 1.55-to-1 ratio; on Nasdaq, a 1.23-to-1 ratio favored advancers.
The S&P 500 posted five new 52-week highs and no new lows; the Nasdaq Composite recorded 26 new highs and 28 new lows.
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