The technological rout was underway, but this was not the case, as stocks ended higher on Tuesday after a fragile start.
The Dow Jones Industrial Average rose 556.79 points, 2.1%, while the S&P 500 rose 1.3%, while the Nasdaq Composite rose 0.9%.
Especially because of what drove stocks up. It was not bank stocks, which were crowded despite the recovery, like Wells Fargo (WFC) and Citigroup (C), which fell 4.6% and 3.9%, respectively, after releasing their results. JPMorgan, which had increased by more than 2% before the opening, only increased by 0.6% after a profit beat. The SPDR S&P Bank ETF (KBE) lost 1.6%.
Instead, energy, materials and industrials led the Dow Jones higher, thanks to big gains in Caterpillar (CAT) – up to 4.8% – Exxon Mobil (XOM) – up 3.3% – Chevron (CVX) – up to 3.5% – and Dow Inc.
(DOW) – up to 2.9%. Looking at these gains, it is obvious that the market was not very worried about the coronavirus on Tuesday, despite the bad news on Monday.
The optimism of the market seems to be reflected in the June NFIB survey on small businesses, published Tuesday morning. It reached 100.6, down from 94.4 in May and just 4 points from where it was before the coronavirus ruined everything, observes RBC economist Tom Porcelli. Hiring plans fell to +16 from +8 in May, and the level of optimism about the future was the highest since just after the 2017 tax cuts. “Sentiment suggests that small firms At least companies (which have been disproportionately affected by the pandemic) are adopting a V-shaped vision of recovery, ”writes Porcelli.
Maybe the market too.
Write to Ben levisohn at [email protected]