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Stocks - Dow Makes Comeback as Rallying Banks Trigger Turnaround

Stock MarketsMay 14, 2020 04:04PM ET
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© Reuters.

By Yasin Ebrahim 

Investing.com – The Dow made an impressive comeback on Thursday, bouncing back from deep losses, led by a surge in financials, even as U.S.-China tensions flared up again and millions more Americans filed for unemployment.  

The Dow Jones Industrial Average rose 1.62%, or 377 points, but had been down by as many 570 points at the lows of the day. The S&P 500 gained 1.15%, while the Nasdaq Composite added 0.91%.

A jump in financials stocks turned the tide of selling to buying as traders seemingly swooped for beaten-down bank stocks, even as the fears of a deep recession and longer-than-expected recovery threaten to ramp-up defaults in the coming months.

JPMorgan Chase (NYSE:JPM) and Bank of America (NYSE:BAC) closed more than 4% higher, while Wells Fargo (NYSE:WFC)  jumped 6.9% following a report of speculation it could merge with Goldman Sachs (NYSE:GS).

But the economic backdrop is hardly supporting the bull case in markets, as the latest surge in weekly jobless claims means that now one in four working Americans are claiming unemployment benefits.

The U.S. Department of Labor reported Thursday that initial jobless claims were 2.981 million for the week ended May 9, above economists' forecasts of 2.5 million.

Just a day earlier, Federal Reserve Chairman Jerome Powell said he expected unemployment would likely peak over the next month. 

Tech stocks, meanwhile, also recovered losses as Facebook (NASDAQ:FB) and Google (NASDAQ:GOOGL) turned positive, with chip stocks also catching a bid.

Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD) and Micron Technology (NASDAQ:MU) were among the biggest gainers.

Elsewhere, Microsoft (NASDAQ:MSFT) climbed 0.5% after it acquired Metaswitch Networks as the tech giant looks to bolster its move into telecommunications.

Energy stocks were supported by rising oil prices after the International Energy Agency touted an improved outlook in the wake of easing coronavirus restrictions, though it warned that any resurgence in infections would pose a major risk to oil demand.

Elsewhere, Boeing (NYSE:BA) ended up 0.75% higher, cutting its intraday losses even as Delta Air Lines (NYSE:DAL) said it will "permanently retire" its fleet of 18 Boeing 777 aircraft by the end of the year as part of efforts to cut costs.

Stocks - Dow Makes Comeback as Rallying Banks Trigger Turnaround
 

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Comments (36)
Mark Bench
Mark Bench May 15, 2020 3:17AM ET
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US market FOMO is the most retarded thing in a long time. The housing bubble comes close in terms of retardation.  Trump is testing the waters now in terms of which rhetoric is gonna get him his re-election. On the one hand he is pumping stocks, on the other he is on the offensive with China. I have a feeling it will go more and more towards the latter as the juice runs out. Thus creating a vicious circle of dumping risk assets, blaming China, China firing back, increasing investor fear, and dumping risk assets again.
Ron Raymond
Ron Raymond May 14, 2020 11:12PM ET
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Traders didn't swoop up the bank stocks, the manipulators and their algos did. Who you kidding? It's not about value, fundamentals, etc., they either needed to get S&P above 2845 by Friday's close, or sell it off much more due to their positions and the end of last week's expected move. Only the great manipulators would bring up the QQQ's near the over bought all time highs during a pandemic when the countries financials are the worst ever, including corporations, etc. Do your homework Yasin. The great manipulators with their algo driven computers have made billions in the last few months, not only with their oil contract tricks and over night futures moves, etc. Manipulating markets buying and selling mainly futures doesn't mean buying and selling a lot of stocks either. The master manipulators are working on stealing, yes stealing billions more over the next year, of course in a legal manner.
Jay Kweon
Jay Kweon May 14, 2020 8:59PM ET
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People don't care about China that much but if i people lose their money they will think about again changing president.  They are angry on their situation now, not to certain group.
James Dorward
James Dorward May 14, 2020 8:54PM ET
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Haters, markets can't be red everyday. Simply can't happen.
Johan Londono
Johan Londono May 14, 2020 8:54PM ET
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the market has been non stop green lol
Kilo Byte
Kilo Byte May 14, 2020 8:39PM ET
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The printing press is running back at full steam!
Tricky Dick
TrickyDick May 14, 2020 8:31PM ET
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When are they going to post a new headline. This ones getting stale,
Franklin García
Franklin García May 14, 2020 7:02PM ET
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All this fake economic reality and surprising upward rallies are only setting up a new "HUGE" downfall that will shatter more than one dreamer
Tricky Dick
TrickyDick May 14, 2020 7:02PM ET
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the people that will get burned will be the little guys who think they can time the markets to the moves of the big guys. In they end, they will be standing with their pants down with **** in hand saying "Wha hapun" whilst the big guys who pulled the rug are laughing while telling them to hang in there,
Vlad Kozyra
Vlad Kozyra May 14, 2020 6:52PM ET
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Good news on bad news...intersting!
Mart Bab
Rubberduck1973 May 14, 2020 6:39PM ET
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Instead of acknowledging that the move is or was totally the wrung direction, they do their best to explain why all this small miracle occure
Michael King
Michael King May 14, 2020 6:37PM ET
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There is no good news or bad news as investment institute knows clearly what most of the retail investors are doing. Always remember, institute cannot get the amount of liquidity if they cannot lure retail investors or smaller market players to go to the direction they need. So when you think the market behaviors irrational, it can very likely be a trap.
Mart Bab
Rubberduck1973 May 14, 2020 6:36PM ET
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Sometimes I think maybe https://investing.com and Bloomberg and such co-inspire with brokers who deliberately push market in the opposite direction to make money on traders and then come forward with some kind of inconsistent coverup story or explanation.
Clif McWhorter
Clif McWhorter May 14, 2020 6:33PM ET
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House of cards
su gu
su gu May 14, 2020 6:23PM ET
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The higher the unemployment, the better. You shorts don't get it. Unemployed people make more money in benefits and they have lots of free time to go out and spend. All the spending will take market to record highs soon. People who are employed are busy working and may not have enough time to spend as they also have to take care of kids and help them with the remote learning etc. I feel sorry for the people who still have jobs.
Nicholas Yap
Nicholas Yap May 14, 2020 6:23PM ET
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People who work have a better change to earn more n gain skills n knowledge, those take unemployment benefits a long term is depend on govt. Have time to spend but dun have much to spend
Laurentiu Costi
Laurentiu Costi May 14, 2020 6:21PM ET
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I think this pump of 800 points was fake! Technical: was a rejection of SMA 50 days (for the moment), but we have intersection of Simple Moving Average 5 & 20 days, down (which is a very bad signal)! Will see tomorrow or the next week the confirmation of the downtrend!
Gilbert Schwob
Gilbert Schwob May 14, 2020 6:06PM ET
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To me, markets look like a dying candle!
Artem Nasonov
Artem Nasonov May 14, 2020 6:05PM ET
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Stock jumped higher - US unemployment increased by 3 million )))
Andy Shadich
Andy Shadich May 14, 2020 6:05PM ET
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It would be funny but also not, if the crash happens in September just like 1929.
Ron Pendell
Ron Pendell May 14, 2020 6:03PM ET
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Deflation will be the culprit that will get us all.
Angelos Nik
Angelos Nik May 14, 2020 5:39PM ET
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the market needs to start discounting the recovery
Andrew Gatlin
JustaGuy May 14, 2020 5:37PM ET
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It's Thursday so the market must go up!  Just look at the historical data.
Ron Pendell
Ron Pendell May 14, 2020 5:32PM ET
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Thought the market might be headed in the right direction when it opened.  Maybe some of the traders realized that 1 out of 4 workers are collecting unemployment.  That many of the small businesses that drive our economy won't be open in 6 months and that 30-40% of the unemployed will not go back to work.  But no, the kids got the joy stick and it was "to the moon".  The market is forward looking but shouldn't be through rose colored glasses.  I'm out.
Muhamed Jaffir
Muhamed Jaffir May 14, 2020 5:32PM ET
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Join the cash crew, I'm sitting in Tbills hoping that inflation doesn't crush too much.
Michael King
Michael King May 14, 2020 4:59PM ET
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Always pay close attention on Trump's twitter/speech on negative rate and trade war, those are the major market risks in the election year. Poor Powell is the weakest Fed Chair in US history and he has to kiss Trump to keep his job. He will do whatever to help Trump regardless the adverse impact to the economy and the future of Americans. The national debt gained about 10 trillion in just 3 years under Trump. With the world economy looks gloomy in the next few years, another 10 - 20 trillion of national debt is expected to be added if Trump is elected again. For a 35 - 40 trillion of debt or over 170% of the GDP, the very likely consequence is the national bankruptcy.
Stanislav Ivanovskiy
Stanislav Ivanovskiy May 14, 2020 4:46PM ET
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last hour pump was hillarious!
steven gitt
steven gitt May 14, 2020 4:44PM ET
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Top 3 headlines today: "Wall Street drops on trade war fears, economic worries"..."Gold Hits Two-Week High as Jobless Data Stoke Global Deflation Fears"...."Stocks - Dow Makes Comeback as Rallying Banks Trigger Turnaround"....it's pointless to even have a brain at this market. just a bunch of random movement by the crooks and click bait headlines
Alexis Gutierrez
Alexis Gutierrez May 14, 2020 4:44PM ET
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Yes Sir.
Etienne Schoen
Etienne Schoen May 14, 2020 4:40PM ET
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Buy on bad news! And since it were really bad news the Dow rushed 800 pt. Lucky who can resist buying because tomorrow China will deliver (fake) news!
Laszlo GG
Laszlo GG May 14, 2020 4:39PM ET
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I have decided to close my longs today (some at loss) just to get out of this insanity. Will wait for the new lows and if they never come, well then I miss out but at least I keep my sanity.
Alexis Gutierrez
Alexis Gutierrez May 14, 2020 4:39PM ET
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I complete understand you.... how is the market even green. On this fake inflated market. I just also closed my longs and my shorts as well. Because this is just not even correct.
djavid hosseini
djavid hosseini May 14, 2020 4:39PM ET
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Bro i did the same , markt is unstable right now especially in europe it was as bad day .
 
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