Another yo-yo day on Wall Street
Wall Street rebounded on Tuesday, and the S&P 500 more than made up all its losses from the day before, after stocks pinballed through another day of erratic trading.
The S&P 500 climbed 1.3%, led by energy producers and other companies whose profits would benefit greatly from a strengthening economy. It was a sharp turnaround from the morning, when the index was down 0.9%, and from Monday’s last-hour slide after California shut bars and reinstated other restrictions amid a jump in coronavirus counts.
The Dow Jones Industrial Average also erased an early loss to end the day at 26,642.59, up 556.79 points, or 2.1%. Big tech-oriented stocks lagged behind, though, in a turnaround from their remarkably resilient run through the pandemic. That held the Nasdaq composite to a more modest gain of 97.73, or 0.9%, to 10,488.58.
The S&P 500 added 42.30 points to 3,197.52, and six out of seven stocks in the index were higher. The move left it 0.4% higher for the week after two yoyo days.
After the market closed, shares of Moderna jumped in after-hours trading after a COVID-19 vaccine it’s developing with the National Institutes of Health revved up people’s immune systems just the way scientists had hoped. The experimental vaccine will start its most important step around July 27: a 30,000-person study to prove if the shots really are strong enough to protect against the coronavirus.
Tuesday’s unsettled market moves came as earnings reporting season kicked off. Three of the nation’s biggest banks painted a mixed picture of how badly the coronavirus pandemic is ripping through their businesses.
“The earnings season is off to a very guarded start,” said J.J. Kinahan, chief market strategist at TD
Ameritrade.
He pointed to cautious forecasts from companies that see the economy possibly taking a step back because of worsening COVID-19 trends, or at least taking longer to recover than expected.
“The fact that they are prepared for bad scenarios is helping to give the market a little confidence,” he said.
Like the broader market, financial stocks drifted between gains and losses for much of the day before turning higher in the afternoon. JPMorgan Chase, Wells Fargo and Citigroup said they collectively set aside nearly $27 billion during the second quarter to cover loans potentially going bad due to the recession.
Delta Air Lines lost 2.6% after its earnings and revenue for the latest quarter fell short of Wall Street’s already very low expectations. The pandemic is keeping fliers on the ground, and Delta’s passenger count plunged 93% during the quarter from a year earlier. CEO Ed Bastian said it could be two years before the airline sees a sustainable recovery.
Stocks have been mostly churning in place since early June. That’s when the S&P 500 pulled back within 4.5% of its record high set in February, after earlier being down nearly 34%. The index is now 5.6% below its record.