NEW YORK, Oct 12 — Wall Street stocks jumped in early trading today, recovering some of losses from a two-day rout following upbeat comments from the US Treasury Secretary and leading bank executives.
The Dow Jones Industrial Average was up 1.3 per cent to 25,373.02 about 20 minutes into the final trading day of the volatile week.
The broad-based S&P 500 gained 1.4 per cent to 2,767.34, while the tech-rich Nasdaq Composite Index advanced 2.0 per cent to 7,471.89.
The Dow lost nearly 1,400 points over two days amid growing concerns about higher interest rates and the impact US trade conflicts might have on corporate profits.
The yield on the 10-year US Treasury bond rose to 3.16 per cent, but the stock gains came after JPMorgan Chase, Wells Fargo and Citigroup all reported increases in year-over-year profit, and the banks’ leading executives gave an upbeat appraisal of the US economy.
“The economy is still very strong,” said JPMorgan Chief Executive Jamie Dimon, “despite these overseas geopolitical issues bursting all over the place.
US Treasury Secretary Steven Mnuchin offered a similarly upbeat view and said the pummeling on Wall Street earlier this week was not surprising given high asset prices.
“I think the fundamentals are still very strong. The US economy is strong, US earnings are strong,” Mnuchin told CNBC. “So I see this as just a natural correction after the markets were up a lot.”
Despite the strong open, Briefing.com analyst Patrick O’Hare the market will have residual unease after the last two days.
“For now, the market is reacting well,” he said. “We can’t say that it is acting well, though, without the benefit of seeing how the entirety of this trading day plays out.” — AFP