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Dow Off Lows, Led by Financials as Regulators Set to Cut Banks a Break

Published 06/25/2020, 12:52 PM
Updated 06/25/2020, 02:54 PM
© Reuters.

By Yasin Ebrahim

Investing.com - Wall Street climbed off lows Thursday, led by financials on reports regulators are set to loosen bank restrictions on investing activities, but investor sentiment remained vulnerable as parts of the U.S. slowed their plans to reopen the economy amid rising Covid-19 infections.

Dow Jones Industrial Average fell 0.07%, or 16 points, the S&P 500 gained 0.11%, while the Nasdaq Composite was

JPMorgan (NYSE:JPM), Goldman Sachs (NYSE:GS), and Bank of America (NYSE:BAC) were up more than 2% after Federal Deposit Insurance Commission officials reportedly said they would loosen restrictions from the Volcker Rule, a post-financial crisis law designed to stop banks - which received federal and taxpayer bailouts - from engaging in risky trading activities. 

Regulators will also ease margin requirement for swaps trades that could free up an estimated $40 billion for Wall Street banks, Bloomberg reported.

The move higher in bank stocks pushed the broader market off session lows, but upside momentum remained challenged on concerns about disruptions to economic reopening efforts as coronavirus cases continue to mount.

Following a recent record rise in daily cases in the state, Texas Governor Greg Abbott put the next phase of reopening on hold.

Coronavirus-related hospitalizations in the state have almost doubled since June 14, when the number was at 2,287.

Concerns are mounting that other pockets of the U.S. including Florida, Arizona, and California could also follow suit as new infections reached 38,115 nationwide on Wednesday, the highest since the pandemic began.

The wave of new infections come as mixed economic data did little to renew expectations over a quick snapback in growth in the second half of the year.

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The U.S. Department of Labor reported Thursday that initial jobless claims decreased by 60,000 to 1.5 million in the week ended June 12, missing forecasts for a 240,000 decline.

"Today's report does not offer much confidence that we will see a strong jobs number when the June NFP data is released at the beginning of next month," Jefferies (NYSE:JEF) said in a note.

The Commerce Department said on Wednesday core durable goods orders rose 4% last month, beating economist forecasts for a 2.5% rise.

Energy rebounded from a rout a day earlier even as oil prices moved off session lows.

In tech, meanwhile, Apple (NASDAQ:AAPL) was flat despite Wedbush hiking its price target on the stock to $425 from $375, citing 5G tailwinds and momentum in its services business.

On the earnings front, KB Home (NYSE:KBH) fell 14% after posting mixed quarterly results a day earlier, as revenue fell short of estimates on weaker than expected second-quarter orders.

Latest comments

Do all the financial gymnastics but the fact remains Covid will be around forever it's the new super pneumonia .
So the industry in US it's now represent by Goldman,JPMorgan and Bank of America?The same actors from previous crisis, bankers getting richers and working class beg for food
Today FED made a really weak impression. It really had big problems to lift the prices. Only when volume shrinked it were a little successful - but for how long, when devastatim figures occur out of every hole ...
This does not bode well for investors.
Desperate times call for desperate measure. It is that bad.
wow this will not inflate the bubble even further
Ah yes, think of the banks! But remember to cur $600 unemployment for 40 million Americans to finance this scam.
I seriously would like to know:Why are peiple so against a President of The US that has taken a job he doesnt need trys to improve the country and is blamed for everything??
Sorry bout spelling mistakesKeyboatd too small
You are part of the problem if you even have to ask that question.
Because, #1 he's bankrupt.  And #2, everything he touches he botches.
Bogus comparison.  Last year’s flu deaths were much higher than the 30,000 in a typical 6-month season, because the vaccine did not match up with the most prevalent strain going around.  So COVID-19 has already taken 4X as many lives in about half the time.
The worst market manipulation ever, is this what they meant by more bazookas?
This bull market has 2 more years to run. Tech is gonna get so inflated it's gonna hurt. The spike up is going to be almost vertical and the covid crash will be a small blur in the chart. Then it will all come down like a meteorite approaching earth
78,000 deaths from the flu last year in the US. And that's with vaccination. Now, doesn't corona look lamer to you? No vaccine, no real lockdowns, and a toll of just over 100,000. Is it worth all that panic?
No real lockdowns?  Then why are Trump and all the GOP governors whining and whining about re-opening the US economy?  If we never locked down, then what are they whining about?  Last year’s number of flu deaths was an outlier due to a bad vaccine match with the most prevalent virus strain going around.  Averagely, only about 30,000 people die from the common flu in the US.  We’ve already had 4X that with COVID-19 in half the number of months.  Bogus comparison!
@Ha Has the real number is about 2-3 times higher. 250.000 deaths within 3 months compared to 78000 deaths a year - put that to a year and we're at 1.000.000 deaths/year WITH shutdown of economy. Imagine where we'd stand without a shutdown of the economy - I can hint you: It would be in the 10-millions.
Bogus comparison.  Average of only 30,000 common flu deaths in a typical 6-month season.  Covid-19 has already taken 4X the lives in about half the time.  And no real lockdowns?  On Mars?
This does not bode well for serious investors.
Were screwed
No need to worry, the Fed's got our back and Trump is always market friendly...that's why the experts are saying we should buy any dips in this new bull market
Agreed.
Fed is market friendly but Trump is a desaster for the markets. Imagine where we'd be without China trade tensions and with a appropriete Corona response - economy would be open again already like in Germany and other states where it was done right with little to no cases left of Corona.
Covid is eating the economy while the market. is eating it"s self. Once the marker has it"s fill Covid will begining it"s second helping of our economy Covid is here to stay.A vaccine is far off as a vaccine for HIV. Best hope is a hit and miss vacceen like the Flu.One thing for sure our economy will never be the same.
The writing is on the wall; this is all about to tumble. Govt only cares about proping up the market and major businesses.
Says you...the experts say continued stimulus and a continually improving economy since March means this new bull market will continue, with a minor 5-6% pullback upcoming which should be bought
Agree with Bulls. This is a new bull market. I know it's hard to believe, but after the current consolidation/correction, this will shoot off. You can't simply have a bear market with full fed support and zero interest.
This regulations were not meant for nothing. The were meant to protect citizens from financial crisis, inflicted by bank. It is strange that these same banks are using a financial crisis, caused by a pandemic,  to pressure the government into removing the regulations. and offcause the Trump admin will gladly do this, on the promise on prepping up a failing market. But maybe I am mistaken
Risky Trades? Let's loosen that one up! Great idea. Let the banks make the call. /s
That joker in the picture just got the word that he may now engage in risky business, and he is on the phone making a deal to fund some Nigerian scammers for a large cut
Are banks blackmailing Trump into removing all this restrictions, that were put there to schild citizens from financial collapse? Seems like the are saying, remove restrictions so we can by risky assets and make market go up. Instead of trading safe within the restrictions, witch will not make market go up?
"Cut Banks a Break" you've got to be kidding. They've been getting all the 'Stimulus'
fed must give stimulus directly to citizens.
It's getting funnier by the minute.
GFC 2.0
Can someone explain how relaxing these rules will benefit the citizens of this country?
It won't! It's not about us, think of the banks why don't you?
Yes! The poor things. How selfish of me....
Flip a coin: Head: fear over "rising infections". Tails: no fear over "rising infections."
Crazy day
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