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.
Cheddar's Big Game Special gives you all the info you need heading into Sunday's event. Pro Football Hall of Famer Terrell Davis, Big Game MVP Hines Ward, and Big Game Champion Emmanuel Sanders dissect the action set to take place on the field, Olivia Harlan Dekker delivers her winning wagers, Tom Morton breaks down what we should expect from advertisers, Azia Celestino showcases the atmosphere from Los Angeles, and Baker Machado discusses what viewers should expect to see unfold during the halftime show.
As the Cincinnati Bengals and Los Angeles Rams prep to face each other in the Big Game at SoFi Stadium in LA, 55 percent of a record number of bettors are projected to drop money on the Rams. Casey Clark, the senior vice president of strategic communications for the American Gaming Association, joined Cheddar News to share some data and predictions based on the greater interest in gambling on Super Bowl LVI. "You know that means that people are migrating away from the predatory illegal market and corner bookie and moving their action into the legal marketplace," he said. "So really encouraging for consumer protections and for those of us who might want to have a little action on the game."
Facebook parent Meta and Grammy Award-winning singer Ciara have joined forces to help black female-owned small businesses. Selected businesses will receive marketing mentorship from Meta along with $100,000 to put into their brand. One such business, The Self Care Suite, is a platform that supports mental health, and founder Tara Pringle Jefferson, along with Irene Walker, Meta Elevate founder and program manager, joined Cheddar News to discuss the program. "Having this opportunity with Meta, with Ciara, really will allow us to focus on our virtual programming, to focus on our e-commerce shop, and, as we kind of adjust, to the new normal in 2022," said Pringle Jefferson.
Tesla has been under mounting regulatory scrutiny by the NHTSA, and has issued numerous recalls, including four within the past two weeks. While the company has issued recalls over the years, the number seems to be increasing in recent months as the company issues fixes for seat belt chimes, pedestrian alerts, its self-driving software, and more. What's behind this uptick in recalls — and how might this impact brand loyalty? Al Root, Senior Writer at Barron's, joins Closing Bell to discuss.
Under Armour released a successful Q4 earnings report amid supply chain issues. The apparel company said it invested in analytics to decipher what drives consumers to its brand. However, the company warned of potential supply problems going forward due to COVID.
Hyperice is a technology company that specializes in physical recovery for athletes, and it's now partnering with the NFL. Christian McCaffrey, Carolina Panthers running back and Hyperice athlete-investor, and Jim Huether, Hyperice CEO, joined Cheddar News to discuss the partnership. "It's definitely for both for performance and for recovery, as somebody who plays a brutal sport and have to go through some of the unfortunate realities of injury," McCaffery said of the products. "You're always fighting for that 0.1 percent difference between winning and losing and and the little things and every second matters."
Aurora Cannabis showed a beat on sales for its quarterly earnings report, a positive sign despite a loss of $59 million. CEO Miguel Martin, joined Cheddar Movers to discuss its latest earnings and prospects for future growth. "If you look at our core businesses, they've all had a great quarter, so steady as we go. Our transformation plan is absolutely on track and we feel really good about where the company's going," he said. "Our balance sheet has never been stronger." Martin also discussed entering the U.S. market and the prospects for the medical marijuana market.
Elon Musk announced that he expects Starship to reach orbit in 2022. The SpaceX CEO delivered updates about the largest space vehicle to be constructed from its Texas facility. Jim Cantrell, CEO and co-founder at Phantom Space, joined Cheddar News to talk about the future of Starship. "I've always done wrong by betting against Elon," he said. "The one thing that I find very curious is it launches 100 metric tons into space, and last year, in the entire year, we launched 750. So, you know, with about seven launches, he could launch every satellite on Earth."
