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S&P 500 Makes Comeback as Airlines, Banks Shine

Stock Markets Jul 20, 2021 04:06PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 rebounded Tuesday, as investors took advantage beaten down travel-related stocks and financials following a rout the previous day.   

The S&P 500 rose 1.5%, the Dow Jones Industrial Average gained 1.6%, or 550 points, the Nasdaq was up 1.6%.

The United States 10-Year yield  rose above 1.2% after dropping to 1.14% earlier in the session, providing a much needed boost to financials, mostly bank stocks following Monday's selloff.

JPMorgan (NYSE:JPM), Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC) rose more than 1%. 

The selloff on Monday was largely attributed to fears that a resurgence in Covid-19 infections would stall the recovery. The delta variant is now estimated to make up 83% of all Covid-19 cases in the U.S., the director of the CDC said Tuesday.

Some on Wall Street suggest the economy has transitioned from a recovery stage to an expansion phase. 

"The most visible signs of the transition have been the return of inflation-adjusted output in June to pre-pandemic levels; productivity-enhancing investment in high-tech equipment; broadening loan growth beyond consumers to businesses; and strong job gains as businesses gained renewed confidence," Wells Fargo (NYSE:WFC) said in a note.

Industrials were one of the biggest sector gainers, led by surge airline stocks including Southwest Airlines (NYSE:LUV), United Airlines (NASDAQ:UAL), American Airlines (NASDAQ:AAL), with the latter up 8%. 

Energy also recovered some of its losses from a day earlier, up more than 1% amid a tentative rebound in oil prices as the delta wave threatens demand.

"Our bottom-up estimate of the impact that a Delta wave could have on global demand instead points to a potential 1 million-barrel-a-day hit for only a couple months, and even less if vaccines prove effect at lowering hospitalizations in DMs, the origin of most summer demand improvements," Goldman Sachs said.

Energy was given an added boost from a 3% surge in Halliburton (NYSE:HAL) as the oil services company reported results that topped market expectations.

Technology stocks also benefited from dip-buying, with Apple (NASDAQ:AAPL), in the ascendency, up more than 2%

UBS lifted its price target on Apple to $166 from $155, after raising estimates on tech giant's revenue and EPS for the third quarter to $74.7 billion and $1.01 from $71.3 billion and 95 cents, respectively.

Microsoft (NASDAQ:MSFT, Facebook (NASDAQ:FB), Google-parent Alphabet (NASDAQ:GOOGL), and Amazon.com (NASDAQ:AMZN) were higher.

International Business Machines (NYSE:IBM) rose 2% after its second-quarter results topped analysts estimates.

"We’re encouraged by momentum around our wider hybrid cloud thesis," Credit Suisse (SIX:CSGN) said in a note as it raised its price target on IBM to $167 from $165.

On the economic front, June housing starts rose 6.3% to 1.64 million, above the consensus. "Housing starts bounced unexpectedly in June [...] but starts appear to be capped at this level, given labor and material shortages," Jefferies (NYSE:JEF) said.

S&P 500 Makes Comeback as Airlines, Banks Shine
 

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Comments (14)
Stephan Franks
smf222 Jul 20, 2021 8:25PM ET
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Since yesterday....
YouTube Account
YouTube Account Jul 20, 2021 7:50PM ET
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Yesterday everybody was scared of covid but today they are all fine with covid. lmao the quality of the headlines on this site is a riot.
Edmunds Vipolzovs
Edmunds Vipolzovs Jul 20, 2021 7:50PM ET
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Yesterday every headline: "COVID FEARS!!!!!!! OMG WE ALL GONNA DIE!!!!!! LOCKDOWN THE WORLD AGAIN!!!!" Today: "Market and airline stocks rally today because we totally just make up everything since our job is just to generate a constant flow of click-bait headlines" For the full story: https://invst.ly/vhmas Yesterday every headline: "COVID FEARS!!!!!!! OMG WE ALL GONNA DIE!!!!!! LOCKDOWN THE WORLD AGAIN!!!!" Today: "Market and airline stocks rally today because we totally just make up everything since our job is just to generate a constant flow of click-bait headlines" For the full story: https://invst.ly/vhmas
Brian Chong
Brian Chong Jul 20, 2021 7:01PM ET
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so yesterday's narrative is that the market is crashing because increase in delta variant of covid. for today now that the market is up, whatever the delta variant of covid just dissappear as if it didn't happen? there us execuse for everything
Paul Richard
Paul Richard Jul 20, 2021 7:01PM ET
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so you think the writers on these news articles know the reasons for the market moves. not likely or they would not be writers!
Mr Robot
Mr Robot Jul 20, 2021 6:50PM ET
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LOL investment banks and exchanges not even trying to hide theit manipulation and pump and dumps. Shameless. Easy money just do the opposite what they say. Easiest money I’ve ever made.
Francesco Lucchesi
Francesco Lucchesi Jul 20, 2021 5:41PM ET
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but patience is required and wait for those eye popping CPI readings
Francesco Lucchesi
Francesco Lucchesi Jul 20, 2021 5:40PM ET
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rampant inflation will annihilate the fed. the one thing those fraudsters can't control, prices
Paul Richard
Paul Richard Jul 20, 2021 5:24PM ET
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hope you bought yesterday, upside on sp500 expected 4 to 6% by eoy.
New Jazenevd
New Jazenevd Jul 20, 2021 5:17PM ET
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Pullbacks are very shallow and brief in this market. Every dip is met by strong buying.
CHADWICK RICHINGTON
CHADWICK RICHINGTON Jul 20, 2021 5:06PM ET
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Airlines with negative earnings and loads of debt 🤣 Banks removing lines of credit and yields at historic lows. What a joke
Joel Schwartz
Joel Schwartz Jul 20, 2021 5:06PM ET
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Banks that don’t provide loans or savings account interest rates that even balance inflation, which is the only reason to keep cash in a bank in the first place. It’s a mess.
TheEnd IsNigh
TheEnd IsNigh Jul 20, 2021 4:57PM ET
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One of these "journalists" should dig into the Fed's insane, nearly $1T overnight repo operations. They're going to need an ever bigger sponge to soak up all that liquidity.
 
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