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Stocks - Dow Racks up 500+ Points Despite Bank Earnings Signaling Pain Ahead

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

By Yasin Ebrahim 

Investing.com – The Dow racked up gains on Tuesday, as investors weighed up the prospect of an eventual economic restart against earnings from banks that point toward further coronavirus-induced pain for the economy.

The Dow jumped 2.39%, or 559 points, theS&P 500 gained 3.06% and the Nasdaq Composite added 3.95%.

Growing signs that some of the Covid-19 hotspots in the country like New York appear to be winning the battle to slow the pandemic have increased calls for the economy to reopen, boosting investor sentiment on risk.

Gross new daily hospitalizations in New York state fell to 1,649 from 1,958 a day earlier, the lowest since March 24, with New York Governor Andrew Cuomo recently suggesting the worst of the pandemic was over.

Governors across New York, New Jersey, Connecticut, Massachusetts, Pennsylvania, Delaware and Rhode Island said they would work together on reopening plans.

But the reopening of the U.S. is unlikely to avert a widely-expected slump in global growth.

The International Monetary Fund said it now expects the global economy to contract by 3% in 2020, compared with a previous estimate for global GDP to expand 3.3% for this year.

Earnings from JPMorgan (NYSE:JPM) and Wells Fargo (NYSE:WFC) underscored the expected economic damage that lies ahead as both banks reported a steep contraction in earnings on loan loss provisions and warned they may need to sock away more money to offset anticipated loan defaults from customers.

Bucking the trend of weaker earnings, Johnson & Johnson (NYSE:JNJ) rasied its dividend and reported a jump in profit, led by increased demand for over-the-counter medicine.

The rally on Wall Street was led by technology, with FAANG and chip stocks catching a strong bid.

Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX) and Google parent Alphabet (NASDAQ:GOOGL) rallied more than 3%.

Energy, meanwhile, proved an exception to the rally, paced by a sharp decline in oil prices just days after OPEC and its allies agreed to cut production by about 10 million barrels a day.

Stocks - Dow Racks up 500+ Points Despite Bank Earnings Signaling Pain Ahead
 

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Comments (30)
Pro trader A
Pro trader A Apr 15, 2020 2:02AM ET
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taxpayers will pay for the pain. you will suffer from the paying tax for your lifetime. let maket fail so that they can stand by themselves with their abilities.
Johnny Crash
Johnny Crash Apr 15, 2020 1:35AM ET
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The fed knows no pain, it's just taxpayers money
Patron Silver
Patron Silver Apr 14, 2020 8:57PM ET
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is this FOMO money?
Chris Sundo
Chris Sundo Apr 14, 2020 8:57PM ET
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No!, it was gift money left over from money set aside for pumping and dumping the markets when it makes a little sense. Today was the first day after Easter and tonight is earnings season's eve as if overnight there would be fireworks to set off the earnings season .. it begs for a li'll fireworks, ain't it?
SeeFai Ross Ng
SeeFai Ross Ng Apr 14, 2020 8:37PM ET
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Too optimistic
Kevin Avila
Kevin Avila Apr 14, 2020 7:44PM ET
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Now we are definitely headed for a depression... The Greatest Depression...
Joe Messeri
Joe Messeri Apr 14, 2020 7:44PM ET
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Hardly we are headed toward America being the safe haven for kur curency, new manufacuring, drugs being made here to the highest standards in the world.I see the USA pulling out of this and our biotech especially doing well
Pham Ngoc Tien
Pham Ngoc Tien Apr 14, 2020 7:43PM ET
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Investors are over optimism
Viktor Delacroix
Viktor Delacroix Apr 14, 2020 7:03PM ET
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Don't fight the fed.
Zibran Vohra
Zibran Vohra Apr 14, 2020 6:36PM ET
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How much economics event affect market?? We have to keep in knowlage about that too.
hami Durmaz
hami Durmaz Apr 14, 2020 6:13PM ET
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panic and fear is the enemy .
Gay Bear
Gay Bear Apr 14, 2020 6:13PM ET
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No pain no gain
Cristian Chibato
Cristian Chibato Apr 14, 2020 6:08PM ET
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Lmao I cannot wait for these simpleton chart doodlers to get ripped to shreds again. Down she goes where she belongs
TeaMaker Tex
TeaMaker Tex Apr 14, 2020 5:54PM ET
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Sick and tired of bail out on behalf of wealthy. NO COMPANY should be allowed of any government funds if they pay a dividend or buy back stock. This is the reason they have no rainy day funds for catastrophes. Due to this continuios bail out for the wealthy we deserve a depression to finally put an end to buy backs and dividends.
Tyler Phillis
Tyler Phillis Apr 14, 2020 5:54PM ET
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What about just compensation? This shutdown is a huge violation of property rights by governments. Are you saying that private citizens should just grin and bear every hardship created by its government?
Jin News
Jin News Apr 14, 2020 5:52PM ET
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Why not think positive? Isn't it better to think the world isn't going to end?
paturi naveen
paturi naveen Apr 14, 2020 5:52PM ET
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World never ends,yes the stock market can fall ,because it is not best indicator of economy,with such a long bull market ,some correction is neccessary
Anthony Crowley
Anthony Crowley Apr 14, 2020 5:49PM ET
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In order for US markets to drop meaningfully the wealthiest 10% of households has to panic and sell. After all they own over 80% of the market. Trouble is the Fed has given them same implied federal backstop as FannieMae and Freddie Mac. A never ending source of funds to keep asset values high. The other 90% (read as the rest of us) don't matter to the 10% as long as they continue to enjoy their lifestyle of privilege. It's when that lifestyle becomes threatened that it's going to get really ugly for the rest of us. The 10% want their stuff and to be pandered to and they'll get that any way they have to.
Jason Bacon
Jason Bacon Apr 14, 2020 5:49PM ET
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Even Berkshire Hathaway has had to cut-loss on a few invetments gone wrong recently.
Proble Matic
Proble Matic Apr 14, 2020 5:36PM ET
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Oh my, this is becoming the bubble of all bubbles. What would one do with their savings if we see inflation and devaluation around the corner?
Philippe Gagnon
Philippe Gagnon Apr 14, 2020 5:29PM ET
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retail data tomorrow, what to expect for costco?
Allen Drewe
Allen Drewe Apr 14, 2020 5:29PM ET
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Costco will post record profits, retail in general though is dead
Robert DZ the patterns
Robert DZ the patterns Apr 14, 2020 5:12PM ET
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Welcome to the Twilight Zone everyone. We are all manikins now.
Proble Matic
Proble Matic Apr 14, 2020 5:12PM ET
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lol
Aaron Last Name
Aaron Last Name Apr 14, 2020 4:59PM ET
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dow Jones elevator heading down. brought to u by Bull S. Hit!
Johnson Gray
Johnson Gray Apr 14, 2020 4:49PM ET
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Trickle down inflation.
Gamer Turtle
GamerTurtle Apr 14, 2020 4:47PM ET
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you can't play against an entity that can whip out 2 trillion every other Thursday after jobless claim data.
Earl castelo
Earl castelo Apr 14, 2020 4:45PM ET
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The Fed is adamant on creating a bottom, Once established they will pull floor right under you, slowly.
Jose Santos
Jose Santos Apr 14, 2020 4:45PM ET
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The market manipulation will continue to work until it doesn’t. Trying to time it is dangerous. Short bets follwing the trend is probably the way to go.
Earl castelo
Earl castelo Apr 14, 2020 4:40PM ET
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It's no suprise the fed is adamant in creating a bottom, Once the economy starts picking back up they will pull the floor slowly. R.I.P.
NYSE NASDAQ
NYSE NASDAQ Apr 14, 2020 4:34PM ET
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stop thinking one way, think both ways bulls and bears so if bulls are buying and short selling is banned so what are you guys expecting from market if there is only buy side.
Ridley Dawson
Ridley Dawson Apr 14, 2020 4:34PM ET
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Exactly
Varga Róbert
Varga Róbert Apr 14, 2020 4:32PM ET
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A thing what almost every people forgot is coming... The inflation! Fed throws away trillions of dollars that is not normal the prices and the value of money won't be normal soon.
NYSE NASDAQ
NYSE NASDAQ Apr 14, 2020 4:32PM ET
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it depends, inflation could remain low due to shutdown because companies are not highering prices,they are lowering prices so it is deflation
NYSE NASDAQ
NYSE NASDAQ Apr 14, 2020 4:32PM ET
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as long as inflation remains low fed will print helicopter money. be cautious
 
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