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Wall Street bounces back on renewed economic optimism

Published 07/20/2021, 07:10 AM
Updated 07/20/2021, 06:51 PM
© Reuters. FILE PHOTO: A person walks by the New York Stock Exchange (NYSE) in New York City, New York, U.S., July 19, 2021. REUTERS/Andrew Kelly

© Reuters. FILE PHOTO: A person walks by the New York Stock Exchange (NYSE) in New York City, New York, U.S., July 19, 2021. REUTERS/Andrew Kelly

By Stephen Culp

NEW YORK (Reuters) - Wall Street ended sharply higher on Tuesday, rebounding from a multi-day losing streak as a string of upbeat earnings reports and revived economic optimism fueled a risk-on rally.

All three major U.S. stock indexes gained more than 1% with the blue-chip Dow, on the heels of its worst day in nine months, leading the charge.

The S&P notched its first advance in four days as well as registering its strongest day since March. The Nasdaq posted its first gain in six sessions.

"It’s a buy-the-dip mentality coming into the market," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.

Economically sensitive small caps and transports outperformed the broader market.

Benchmark U.S. Treasury yields bounced back from five-month lows, in the wake of their biggest single-session decline since February in the prior session. This helped boost rate-vulnerable banks by 2.6%.

"The economically sensitive stocks are up today," Carlson added. "When the 10-year (Treasury yield) goes down in a short period of time, that typically doesn’t happen with an economy that’s supposed to be growing. Firming in the 10-year (yield) indicates that perhaps the economy isn’t going to be falling off a cliff."

Mounting concerns over the highly contagious Delta variant of COVID-19, now responsible for the majority of new infections, have sparked sell-offs in recent sessions as worldwide vaccination efforts gather momentum.

"Things like the Delta variant can certainly impact in the margins," Carlson said. "It doesn’t take a whole lot of fear in some investors to create what we saw yesterday."

For an interactive graphic on global vaccine deployment and availability, click here https://graphics.reuters.com/world-coronavirus-tracker-and-maps/vaccination-rollout-and-access.

The Dow Jones Industrial Average rose 549.95 points, or 1.62%, to 34,511.99, the S&P 500 gained 64.57 points, or 1.52%, to 4,323.06 and the Nasdaq Composite added 223.89 points, or 1.57%, to 14,498.88.

Of the 11 major sectors in the S&P 500, all but consumer staples closed green. Industrials fared best, rising 2.7%.

Second-quarter reporting season has hit full-stride, with 56 of the companies in the S&P 500 having posted results. Of those, 91% have beaten consensus, according to Refinitiv.

Analysts now see annual S&P earnings growth of 72.9% for the April-June period, a significant improvement over the 54% growth seen at the beginning of the quarter.

Halliburton (NYSE:HAL) Co rose 3.7% after a bounce-back in crude prices boosted oilfield services demand, leading the company to post its second consecutive quarterly profit.

Peloton Interactive (NASDAQ:PTON) Inc advanced 6.7% after announcing it would provide UnitedHealth Group (NYSE:UNH)'s fully insured members free access to its live and on-demand fitness classes.

Moderna (NASDAQ:MRNA)'s stock dropped 2% in a volatile session on Tuesday, with the COVID-19 vaccine maker the most heavily traded company on Wall Street ahead of its debut in the S&P 500 on Wednesday. [L1N2OW2AK]

Netflix Inc (NASDAQ:NFLX) shares dipped more than 3% in after- hours trading after its forecast missed estimates.

Shares of Chipotle Mexican Grill (NYSE:CMG) gained over 2% post-market after its earnings and revenue beat consensus.

Advancing issues outnumbered declining ones on the NYSE by a 4.44-to-1 ratio; on Nasdaq, a 3.59-to-1 ratio favored advancers.

© Reuters. FILE PHOTO: A person walks by the New York Stock Exchange (NYSE) in New York City, New York, U.S., July 19, 2021. REUTERS/Andrew Kelly

The S&P 500 posted 41 new 52-week highs and no new lows; the Nasdaq Composite recorded 45 new highs and 76 new lows.

Volume on U.S. exchanges was 10.62 billion shares, compared with the 10.19 billion average over the last 20 trading days.

Latest comments

Cause yesterday's 900pt drop had Nothing to do with next week's Big tech earnings coming out. Buy low, sell high!
The only renewed optimism is the fact there will be another 6-8K point market crash. When that happens, I am ready to buy. Are you? The COVID crash was good to me.
LOVE IT -- it was easy to see ;) __ I did say so, on last Sunday eve ;)
Love and said what ? Be specific dude
Autogenerated article
What the pho?
Are people really this stupid? Market sells off one day. Next day it’s “roaring back” as if something significant has changed overnight. Place your bets at the Wall Street casino.
-- algos, man -- The news are made solely to drive the charts. You didn't know yet?
You must be new here..
Fraudulent, criminally manipulated joke.  Another "rally" that walks a tightrope with zero selling pressure.  Let's get those average holdings in retirement plans even higher, so when the rug gets pulled, the financial devastation will that much greater.
Value... stocks.... What's next? Alien invasion stocks? 👽
The charade keeps going on and on
Yesterday fall in Dow was attributed to rising delta virus cases. Today entire loss is wiped out and you r again here with some other story . Good job. I told you yesterday that market is going to climb.
No one jumping out the window today. This is a " bloodbath" . such garbage
Nasdaq moves like a Bitcoin lately, it has become a frenzy as Bitcoin and has become volatile. where is the ceiling, if i may ask
"Value" stocks?  So Zoom and Tesla with extremely high P/E Ratios are considered "value" stocks?
Another uninhibited "rally" underway.  Where's the ceiling to limit the "gains?"  Where's the plunge at 10AM?  The reversal at 11AM?  Welcome to the US Ponzi Scheme, greatest financial FRAUD in history, as it resumes the financial defiling of America in broad daylight.
Concur
Hohoho
ho
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