Wall Street jumped on Tuesday as hopes that President Donald Trump could move to ease coronavirus-induced lockdowns overshadowed dismal quarterly earnings reports from JPMorgan and Wells Fargo, Reuters reported.
White House adviser Larry Kudlow said Trump would make a number of announcements about re-opening the U.S. economy in the next day or two as the health crisis appeared to be ebbing, but some state governors have said the decision to re-start businesses lies with them.
New York saw total hospitalizations fall for the first time since the onset of the novel coronavirus pandemic, Governor Andrew Cuomo said.
“There is belief that we’re past the worst part of the pandemic and every single day it’s just being bolstered further,” said Yousef Abbasi, global market strategist at INTL FCStone Financial Inc in New York. “If we start to get clarity on what parts of the economy could start opening up, we’re probably going to trade more on the fundamentals and economic data.”
U.S. stock markets have recovered in the past month after slumping more than 30% from their February record highs, supported by a raft of monetary and fiscal stimulus and early signs of a plateauing in the number of coronavirus cases, Reuters adds.
However, S&P 500 firms are still off about $4.7 trillion in market value and analysts have warned of a torrid earnings season as the containment measures ground business activity to a shuddering halt.
JPMorgan Chase & Co and Wells Fargo & Co reversed early gains to drop 3.3% and 4.5% respectively, as first-quarter profits plunged with both banks setting aside billions of dollars to cover potential loan-losses from the pandemic.
“Investors are looking past what’s undoubtedly going to be a very weak earnings season and are somewhat optimistic that things will get back to normal next quarter,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.
Johnson & Johnson rose 4.9% as it reported better-than-expected quarterly earnings and boosted its dividend, signaling financial stability at a time when a slate of blue-chip firms have suspended dividends to shore up cash reserves.
At 1:09 p.m. ET, the Dow Jones Industrial Average was up 480.51 points, or 2.05%, at 23,871.28 and the S&P 500 was up 70.77 points, or 2.56%, at 2,832.40. The Nasdaq Composite was up 286.13 points, or 3.49%, at 8,478.56.
A 4.6% jump for Apple put the tech-heavy Nasdaq on course for a fourth straight day of gains as data showed iPhone shipments to China rebounded slightly in March after crashing in February.
Tesla surged 12.3% and was among the top boosts to the Nasdaq after brokerage Credit Suisse upgraded the electric carmaker’s stock to “neutral”.