Trader Ashley Lara works on the floor of the New York Stock Exchange, Tuesday, July 20, 2021. Stocks are opening higher on Wall Street Tuesday as investors shake off a rout a day earlier brought on by concerns about the spread of a more contagious variant of COVID-19. (AP Photo/Richard Drew)
By Damian J. Troise and Alex Veiga
Stocks jumped on Wall Street Tuesday, making up much of the ground they lost a day earlier when worries flared about spreading cases of the more contagious variant of COVID-19.
The comeback was the latest rebound following a pullback as investors continue to try and assess how badly rising infections will hurt the economic recovery.
The S&P 500 rose 64.57 points, or 1.5%, to 4,323.06. The gain erased most of the benchmark index's loss from Monday's 1.6% drop, its biggest since May.
Airlines, cruise operators and other stocks that sank a day earlier were back in the winning column. American Airlines climbed 8.4% and Carnival gained 7.5%. Technology, financial, industrial and health care stocks also powered a big share of the benchmark index's broad gains.
The Dow Jones Industrial Average rose 549.95 points, or 1.6%, to 34,511.99. The blue-chip index lost 725 points a day earlier. The Nasdaq composite gained 223.89 points, or 1.6%, to 14,498.88.
Small company stocks mounted the strongest comeback. The Russell 2000 index outpaced the other major indexes with a gain of 63.62 points, or 3%, to 2,194.30.
The sharp one-day rebound for the broader market shows yet again just how choppy trading has been as investors try to figure out the lingering virus' impact on inflation, the broader economy and businesses ranging from airlines to banks. The broader market has managed to keep gaining ground even with all the churn and the benchmark S&P 500 notched several records over the last few weeks.
The spread of the more contagious delta variant of COVID-19 has become a worry spot for investors and policymakers. The Centers for Disease Control has said an estimated 83% of cases in the U.S. are tied to the delta variant of the virus. While tens of millions of Americans have gotten vaccinated, there remains a significant percentage of Americans who are either reluctant or outright hostile to the idea of being vaccinated.
Los Angeles Country last weekend reinstituted an indoor mask mandate as the region's infection rate was climbing quickly yet again. Other parts of the country, like Southern Missouri, are flooded with COVID cases that are straining hospitals once more.
Bond yields fell sharply on Monday on fears that the strong economic recovery from the pandemic could be put at risk from additional lockdowns or coronavirus cases. The yield on the 10-year Treasury note dipped as low as 1.14% early Tuesday, but has reversed course and is up to 1.21% from 1.18% the day before. A week ago it was trading at 1.42%.
“We’re seeing a more dramatic extension of what we experienced over the last couple of weeks, which is really the market searching for a narrative,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management.
Investors are looking for whatever clues they can get to better gauge the continued trajectory of the economic recovery. Everything from comments from the Federal Reserve to outlooks from companies and economic data are being used to get a clearer picture of what the economy might look like throughout the rest of this year and into 2022.
Wall Street is also in the midst of earnings reporting season. IBM rose 1.5% after the company reported better than expected revenue and profits, helped by its cloud computing business. Hospital operator HCA Healthcare jumped 14.4% for the biggest gain in the S&P 500 after handily beating Wall Street’s second-quarter profit and revenue forecasts.
Outside of earnings, drug distributors made some big moves following reports that they are on the verge of $26 billion settlement over opioid lawsuits. AmerisourceBergen rose 3.5% and McKesson rose 3.2%.
Paint and coatings maker PPG Industries fell 4.4% for the biggest decline in the S&P 500 after its second-quarter profit fell short of analysts' forecasts and it faces supply chain issues and higher raw materials prices.
Memorial Day rang in the unofficial start of summer here in the United States -- and with it, the unofficial start of summer travel. Whether consumers traveled by air or by land, they probably experienced some form of frustration over the weekend. Flyers faced delays and cancellations, and drivers faced the most expensive gas prices ever recorded on Memorial Day. Zach Griff, Senior Aviation Reporter for the Points Guy, joins Cheddar News' Closing Bell to discuss.
Next-generation gaming ecosystem Joystick recently raised $8 million in a seed round and is in the process of raising a $110 million Series A funding round. Gaming ecosystems are a relatively new type of platform in the Web3 space, allowing users to maximize their play-to-earn gaming opportunities, exchange crypto-currencies, and sell their digital assets. Joystick says its platform is flipping the current model on its head by giving players the opportunity to keep 100% of the revenue they earn. Robin Defay, co-founder and CEO of Joystick, and Michael Le, co-founder of Joystick and TikTok content creator, join Cheddar News' Closing Bell to discuss.
Abe Stein, Head of Innovation at Sports Innovation Lab, joins Cheddar News' Closing Bell, where he explains why the top four spots on his company's 2022 list are European soccer clubs and discusses Sports Innovation Lab's plan to publish data on women's pro sports teams in the not-too-distant future.
Joel Birch, Co-Founder and CEO of Stacked, joins Cheddar News' Closing Bell, where he explains why he doesn't see any new catalysts that would lead to a Bitcoin rally at the moment. He also reiterates that now is a good time for long-term Bitcoin investors to buy low.
The dating app Bumble has sponsored bills and pushed lawmakers to criminalize the online practice of sending unsolicited nudes or “cyberflashing." Payton Iheme, Bumble's head of public policy for the Americas, joined Cheddar News to discuss why the app was going after the harassing behavior beyond its own platform. "Now, while we went to work internally in the company, and we created something called private detector to automatically blur those images so the user can decide if they want to see them, there's nothing for the rest of the internet," she said. "And so that's why we went to work with these laws."
The holiday weekend saw Disney+ and Netflix competing head-to-head for streaming views as the Disney behemoth kicked off the unofficial start to summer with its release of "Obi-Wan Kenobi" and Netflix responded with the first part of "Stranger Things" Season 4. The streaming giants caught the eye of Wall Street, and Seth Schachner, the managing director at consultancy Strat Americas, joined Cheddar News to break down the heavy hitters. "This is a very tough, competitive game, and I don't see it getting any easier," he said. "I think you'll probably see more consolidation."
Amid high inflation, shoppers are pinching their pennies in the grocery stores and becoming more frugal when food shopping. However, supermarkets like Kroger are pushing back against passing on the higher costs and demanding reasons for the higher food prices from suppliers.
The founder and president of Cyborg Mobile Kobie Hatcher has been on a strong trajectory to disrupt his industry with a program called The New Technologists. It's not only meant to address the diversity gap within large tech companies but also help pave the way to transform the lives of young BIPOC students. He joined Cheddar News to talk about how he's working to make a difference with the lack of diversity in tech. “There's truly no lack of talent out there. It's just identifying them and letting them know that, hey, I've been in the tech sector for over 20 years. I see you. I know what you can bring, bring it, we need it," Hatcher said.
