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Wall Street closes higher, Treasury yields rebound despite COVID variant fears

Stock MarketsJul 20, 2021 05:46PM ET
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2/2 © Reuters. FILE PHOTO: A man looks at stock market monitors in Taipei January 22, 2008. REUTERS/Nicky Loh 2/2

By Jessica DiNapoli

NEW YORK (Reuters) - Wall Street notched a comeback on Tuesday with all the major indexes closing higher, and yields on safe-haven U.S. Treasuries bouncing off lows as investors sought riskier assets even as worries remained about a resurgence in COVID-19.

Wall Street's main indexes all rose by more than 1.5%, with the Dow ahead of the others. Yields on U.S. 10-year Treasuries came off a new five-month low.

"Today's move was basically due to an over-correction from yesterday. Yesterday, it was an overreaction to an inflation scare, and the virus," said Catherine Avery, president of Catherine Avery Investment Management. "I think people are realizing that as earnings are coming out more and more, that stocks are the place to be."

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

Of the 11 major sectors in the S&P 500, all but consumer staples .SPLRCS closed up. Industrials rose the most, climbing 2.7%.

MSCI's gauge of stocks across the globe gained 0.83%.

Ten-year Treasury yields rose 2.9 basis points to 1.210%, after tumbling to 1.128% earlier in the session. The yield on the benchmark 10-year note has plunged almost 30 basis points in a week after investors were convinced that data for June showed the biggest jump in U.S. consumer prices in 13 years was short-lived.

"The bond market has valid concerns. But, even with the moderated outlook, it still leaves a lot of room for equities," said Jack Ablin, founding partner and chief investment officer at Cresset Capital Management. "The bond market isn't calling for a recession, but perhaps a tamping down of growth expectations."

In a separate gauge of investor risk appetite, bitcoin fell below $30,000 for the first time since June 22.

"The narrative from yesterday that bled through the weekend was a little bit of a risk-off scenario around the increasing COVID cases," said Charlie Ripley, senior investment strategist for Allianz (DE:ALVG) Investment Management. "I don't think it's so much that investors are worried about the cases themselves. It's government officials and their reaction, where we could get into a situation where restrictive measures get put in place again, that dampens growth over the long run."

Riskier assets globally have come under pressure recently as many countries struggle to contain the outbreak of the fast-spreading Delta virus variant, raising fears that further lockdowns and other restrictions could upend the worldwide economic recovery.

A fully vaccinated senior aide to U.S. House of Representatives Speaker Nancy Pelosi tested positive for COVID-19, Pelosi aide Drew Hammill said on Tuesday.

The Delta variant is the cause of more than 80% of the new COVID-19 cases in the United States, but the authorized vaccines in the country are still more than 90% effective in preventing hospitalizations and deaths, top U.S. infectious disease expert Anthony Fauci said during a U.S. Senate hearing.

The U.S. dollar rose to a three-month peak on Tuesday as investors continued to flee to safety.

The gains in the dollar come as yield differentials have moved against it.

In afternoon trading, the dollar index, a measure of its value against six major currencies, rose 0.1% to 92.961, after hitting a three-month high of 93.161 earlier in the session. (GRAPHIC-Dividend yield vs bond yield, https://fingfx.thomsonreuters.com/gfx/mkt/jnpweggxqpw/Pasted%20image%201626766612409.png)

Oil prices turned positive as investors looked to buy a dip.

U.S. crude rose 1.36% to $67.42 per barrel and Brent was at $68.87, up 0.36% on the day.

Wall Street closes higher, Treasury yields rebound despite COVID variant fears
 

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Comments (12)
Francesco Lucchesi
Francesco Lucchesi Jul 20, 2021 5:26PM ET
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because Powell is gonna print even more
Chatt career
Chatt career Jul 20, 2021 2:19PM ET
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Despite=we don't care
Chatt career
Chatt career Jul 20, 2021 2:19PM ET
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The despite in the title
Anderson Fitzgerald
Anderson Fitzgerald Jul 20, 2021 1:22PM ET
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USD is trash
Whaling Trawler
Whaling Trawler Jul 20, 2021 1:51AM ET
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I'm an outbreak fan. Go team go!!🗣️
rweqrwq rwqrwqrwq
rweqrwq rwqrwqrwq Jul 20, 2021 1:11AM ET
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these titles have become gold comedy, i laugh out loud reading them every single time!
Theo Ross
Theo Ross Jul 20, 2021 1:11AM ET
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Are you alright?
Jo Riley
Jo Riley Jul 20, 2021 12:06AM ET
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Virus mutations = smokescreen for terrible US Marxist/Democrat policies:  high taxes, high regulations, high wasteful spending. Cowardly business leaders afraid to speak out - "Oh no!  I might get "cancelled" ; some people might criticize me!" - so pretend it's the virus.
zen cool
zen cool Jul 20, 2021 12:02AM ET
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whatsoever it is what it is, 1 year and 8 months dragging, go to Mars if whosoever feels scare
Forex Harbingers
Forex Harbingers Jul 19, 2021 11:40PM ET
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Dont fall for the headlines. Just follow the liquidity.
Francesco Lucchesi
Francesco Lucchesi Jul 19, 2021 11:40PM ET
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true
Jokers R Us
Jokers R Us Jul 19, 2021 11:11PM ET
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Tomorrow: "Stocks rally as covid fears subside"
Tinie Pg
Tinie Pg Jul 19, 2021 11:11PM ET
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🤣🤣🤣🤣🤣
Grant McBride
Grant McBride Jul 19, 2021 11:11PM ET
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The news for 2021 has already been written last year. They are just carefully timing its publication.
Byedin Youlost
Byedin Youlost Jul 19, 2021 10:58PM ET
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The scam continues
Leo Philip
Leo Philip Jul 19, 2021 10:41PM ET
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No new real impact of Delta variant on economy seen than before , but yes markets are using this as a reason to fall. Don't fight against the market. Go with it. If it wants to fall, make money on the fall.
Hunt Richardson
Hunt Richardson Jul 19, 2021 10:41PM ET
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"Fear" is Reuters' most overused headline word. In this case "concern" would be appropriate. The variant affects unvaxxed people. Most people have been vaccinated and if this doesn't get them to do it then sorry, it's their problem
Josh Davis
Josh Davis Jul 19, 2021 10:41PM ET
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The vaccine doesnt protect against any covid strain hence the infections after innoculation. So if it doesnt protect me from contracting why get it? Also if it was great and safe and effective why hasnt all of faucis staff received it? What about all the doctors and nurses that wont? Like me? Try again. Only like 41% of americans have been fully vaccinated and there are 37 therapeutics to stop covid. Try that again as well
Carlos Sacasa
Carlos Sacasa Jul 19, 2021 10:41PM ET
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Where is the data? Sure, delta is spreading but by what statistics? This is just fearmongering without information.
Alejandro Ca
Alejandro Ca Jul 19, 2021 10:41PM ET
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Josh Davis  It doesn't necessarily stop you from getting infected but it will prevent serious illness. You know, the thing that killed ******** Americans. It will also reduce the chance of spread. I am a doctor, I don't know a single doctor or nurse that has not gotten it. Stop spreading BS.
Roland Hara
Roland Hara Jul 19, 2021 10:41PM ET
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Alejandro Ca you’re a Doc you say? You stated that it will stop you from being infected, which means vaxers carry it, which means they spread it, although they have the vaccine. But you’re saying that it’ll reduce the chance of spread? It seems you’re contradicing yourself here “doc”..
Roland Hara
Roland Hara Jul 19, 2021 10:41PM ET
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Roland Hara *it will NOT stop you from infection
 
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