NEW YORK, July 15 ― Wall Street ended higher yesterday, led by a surge in the Dow Jones Industrial Average, as investors bought energy and materials stocks and looked beyond a recent surge in coronavirus cases.
The S&P 500 energy, materials industrial, health and consumer staples indexes all jumped.
Limiting gains in the Nasdaq and S&P 500, Amazon lost ground, extending a rotation that began Monday out of many big-name technology and momentum stocks that have led much of the US 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 US lender, rose after it posted a smaller-than-expected 51 per cent drop in second-quarter profit.
Wells Fargo & Co tumbled after booking a quarterly loss for the first time since the 2008 financial crisis. Citigroup Inc dropped 3.6 per cent as it reported a steep fall in quarterly profit.
The S&P 500 banks index dropped as the three banks set aside a combined US$28 billion (RM119.6 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 yesterday.
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.
Unofficially, the Dow Jones Industrial Average rose 557.51 points, or 2.14 per cent, to 26,643.31, the S&P 500 gained 42.37 points, or 1.34 per cent, to 3,197.59 and the Nasdaq Composite added 97.73 points, or 0.94 per cent, to 10,488.58.
Delta Air Lines Inc dropped 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 after it said it plans to start a late-stage clinical trial for its Covid-19 vaccine candidate on or around July 27. ― Reuters
