Wall Street soars, driven by energy and materials

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By Noel Randewich


© Reuters / BRENDAN MCDERMID
New York Stock Exchange opens during COVID-19

(Reuters) – Wall Street surged Tuesday, the Dow Jones industry average ending at more than 2%, as investors bought energy and materials stocks and outpaced the recent surge in coronavirus cases.

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In widespread commerce, Moderna Inc. jumped 18% after the biotech company’s experimental vaccine for COVID-19 was shown to be safe and elicited immune responses in an ongoing study at an early stage.

The extension of the emini S&P 500 futures trade suggested that investors expect Wall Street to rise on Wednesday, with futures contracts up 0.8%. The actions of airlines, cruise lines, hoteliers and concert organizers also jumped after the report by American researchers on the study of the Moderna vaccine.

On Tuesday, in regular exchanges, the S&P 500 indices for energy, materials and industry jumped by more than 2%, while health, technology and basic consumer goods each increased by more from 1%.

Amazon.com Inc ended down 0.6%. A recovery from deeper losses from Amazon and other tech and growth stocks that recently performed well, including Facebook and Netflix, gave the Nasdaq a last-minute push.

“Today is counterintuitive. We read about the shutdown of the California economy and a record peak in Florida cases, yet you have energy values ​​in mind, “said Bob Shea, general manager of TrimTabs Asset Management in New York. “We are witnessing a mini-rotation in value. ”

JPMorgan Chase & Co, the largest US lender, rose 0.6% after posting a 51% weaker-than-expected drop in profits.

Wells Fargo & Co fell 4.6% after posting a quarterly loss for the first time since the 2008 financial crisis. Citigroup Inc. fell 3.9% after announcing a sharp drop in quarterly profit.

The S&P 500 bank index fell 1.2% as the three banks set aside $ 28 billion to cover potential losses on loans to borrowers affected by the coronavirus pandemic.

Wall Street has recovered most of its coronavirus losses since March, as a series of monetary and fiscal stimulus and optimistic economic data have raised hopes of a rapid recovery after the pandemic. But a recent record outbreak of COVID-19 and new trade restrictions, particularly in California, have again created uncertainty about the time it will take for the economy to recover.

On Tuesday, Alabama, Florida and North Carolina reported a record daily increase in deaths from COVID-19.

After falling more than 2% in Nasdaq on Monday, some investors feared that the recent Wall Street rally would end. With Tuesday’s rapid rebound, the Nasdaq spent two months without experiencing two consecutive days of decline.

For a graph on the growing potential economic impact of COVID-19:

https://fingfx.thomsonreuters.com/gfx/mkt/xlbpgoebepq/Pasted%20image%201594676240048.png

Investors are bracing for what could be the biggest drop in S&P 500 companies’ quarterly profits since the 2008 financial crisis, according to Refinitiv IBES data.

The Dow Jones Industrial Average jumped 2.13% to finish at 26,642.59 points, while the S&P 500 gained 1.34% to 3,197.52. The Nasdaq Composite added 0.94% to 10,488.58.

Delta Air Lines Inc. ended down 2.65% after warning that it would take more than two years for the industry to recover from the “staggering” impact of the coronavirus pandemic on a sustainable basis, with demand largely following the infection curve in different places.

Growing issues outnumbered those on the NYSE by a ratio of 1.92 to 1; on the Nasdaq, a ratio of 1.63 to 1 favored the advancers.

The S&P 500 posted seven new 52-week highs and no new lows; Nasdaq Composite recorded 35 new highs and 31 new lows.

The volume of American exchanges was 10.7 billion shares, against 11.8 billion on average for the full session of the last 20 trading days.

(Report by Noel Randewich; Additional report by Medha Singh and Devik Jain in Bengaluru; Edition by Marguerita Choy and Leslie Adler)

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