In this June 16, 2021 file photo, the facade of the New York Stock Exchange. Stocks are opening higher on Wall Street, Wednesday July 21, as the market continues to recover from a sharp drop at the beginning of the week. (AP Photo/Richard Drew, File)
By Alex Veiga
Stocks closed higher on Wall Street for a second straight day Wednesday following a sharp drop at the beginning of the week.
The S&P 500 rose 0.8% and is now on pace for a weekly gain. Technology stocks, banks and companies that rely on consumer spending helped drive the benchmark index's advance. Energy stocks also rose as the price of U.S. crude oil marched 4.3% higher. Utilities and real estate stocks were among the decliners.
The market’s swift rebound from Monday’s sharp sell-off reflects investors’ tug-of-war as they factor in signs of economic growth as the economy reopens, strong corporate earnings and a recovering job market against the potential risks of rising inflation and the more contagious delta variant of COVID-19.
The stock market has begun looking past the pandemic and toward what the recovery looks like, said Bill Northey, senior investment director at U.S. Bank Wealth Management.
"Now there is some degree of question: what is the pace, the degree of that economic recovery from here?” Northey said.
The S&P 500 gained 35.63 points to 4,358.69. The Dow Jones Industrial Average rose 286.01 points, or 0.8%, to 34,798, and the Nasdaq composite added 133.08 points, or 0.9%, to 14,631.95. The Dow and Nasdaq have also recouped their losses from Monday's sell-off.
Traders continued to bid up small company stocks. The Russell 2000 index outpaced the other major indexes with a gain of 39.74 points, or 1.8%, to 2,234.04.
The S&P 500, a benchmark for many index funds, has managed to keep gaining ground and notched new highs over the last few weeks despite bouts of choppy trading. What’s helped push stocks higher the last two days is better-than-expected results from big corporations.
Summer is typically a slow time for Wall Street, with investors and traders taking vacations and holding steady until later in the year. The dominant thing that will drive the market, with the exception of big economic reports, will be how well companies do versus expectations.
Dow component Coca-Cola rose 1.3% Thursday after the company raised its full-year forecast and reported better-than-expected results. Fast food chain Chipotle Mexican Grill jumped 11.5% for the biggest gain in the S&P 500 after the company also reported much better than expected results after the closing bell Tuesday.
Not all earnings were positive. Netflix fell 3.3% after reporting its worst slowdown in subscriber growth in eight years.
Earnings season will kick into high gear next week, when more than 100 members of the S&P 500 will report their quarter results. So far earnings season has been strong, with more than 80% of the S&P 500 beating analysts' forecasts according to FactSet. That's despite the already high expectations that Wall Street has had for corporations.
Bond yields continued to recover from their sharp fall earlier in the week. The yield on the 10-year Treasury note rose to 1.29%, up from 1.20% the day before. The 10-year note's yield had fallen into the teens on Monday on concerns that the delta variant of the coronavirus might impact economic growth globally.
Among the big winners Thursday, Morgan Stanley rose 3.6%, chipmaker Lam Research gained 5% and Occidental Petroleum vaulted 7.1%. Cruise operators, big losers in Monday’s market slide, rallied again. Norwegian Cruise Line vaulted 10.1%, Carnival gained 9.4% and Royal Caribbean rose 5.4%.
Art Hogan, Chief Market Strategist at National Securities, joined Cheddar News' Closing Bell, where he says investors are taking a wait-and-see approach when it comes to the situation between Russia and the Ukraine and elaborates on the impact higher oil prices stemming from the conflict would have on the market.
Kyle Jaeger, senior editor for Marijuana Moment, joined Cheddar News' Closing Bell, where he explains why a stigma still exists for the cannabis industry in advertising and social media after NBC rejected Weedmaps' ad for the big game even though more states across the country are legalizing cannabis.
A bipartisan bill introduced by U.S. Senators Amy Klobuchar (D-MN) and Cynthia Lummis (R-WY) aims to tackle the spread of misinformation on social media platforms, as well as the addictive nature of the sites and negative mental health impacts they have on users. The 'Nudge Act' would require studies to find and compile potential interventions that platforms could use to encourage people to think before they share a post, or log off after spending too much time on an app. The FTC would create rules based on these findings, and hold the platforms accountable. But will it work? Jesse Lehrich, co-founder of Accountable Tech, joins Closing Bell to discuss the bill, whether real results and regulations could come from it, and more.
We know that the Los Angeles Rams emerged as Super Bowl champions, but the crypto industry also came out a winner on Sunday with several notable companies getting airtime in primetime. However, Richard Smith, author of the Risk Rituals Newsletter, joins Cheddar News' Closing Bell, where he says the campaigns were a 'disappointment' and adds that crypto companies would be wiser spending their resources on creating value.
A.I.-based entertainment company, Deedub, recently raised
$20 million in a Series A round, led by Insight Partners. Deepdub uses A.I. technology to automate the dubbing process for foreign-language movies or TV shows, while using actors' original voices. The company says it can take just two to three minutes of data from an actor's voice and transform the voice into a different language. The funding comes as foreign-language films and shows like Netflix's 'Squid Game' have recently become more popular with audiences in the U.S. and around the world. Oz Krakowski, Chief Revenue Officer at Deepdub, joins Cheddar News' Closing Bell to discuss.
Energy Vault, the company developing sustainable, grid-scale energy storage solutions, is now trading on the New York Stock Exchange following the completion of its business combination with Novus Capital Corporation II. Energy Vault develops sustainable, grid-scale energy storage solutions designed to advance the transition to a carbon free, resilient power grid. Robert Piconi, co-founder and CEO of Energy Vault, joins Cheddar News' Closing Bell to disucss.
A new mobile app has launched just in time for Valentine's Day. Our.Love bills itself as an A.I.-powered, gamified, relationship wellness app for couples. The app is set in what the company calls the Coupleverse, a virtual world where each couple can build a virtual relationship home as they also build their real-world relationship. Founder and CEO Tal Zlotnitsky joined Cheddar to discuss how the app works. "The concept behind Our.Love is to give people the opportunity to understand where they stand in their relationship through very simple metrics that we provide within the app that will help them in real-time, see where they stand, see where their partner is, and be able to get closer together," he said.
Alyson Wilson, VP of Brand Innovation at Alo Yoga, joins Cheddar News to discuss the yoga apparel company entering the metaverse and teaming up with Spring Studios for New York Fashion Week.
