Shares surged on Wall Street on Tuesday as investors resumed buying after a rout the previous day over concerns about the spread of a more contagious variant of COVID-19.
The S&P 500 Index was up 1.5% as of 1:43 p.m. EST (5:43 p.m. GMT), regaining most of the ground lost since Monday’s drop, its largest since May.
The Dow Jones Industrial Average rose 558 points, or 1.7 percent, to 34,521; and the Nasdaq Composite Index rose 1.6%. The Russell 2000 Small Business Equity Index topped other major indexes with a gain of 2.9%.
The strong one-day rebound for the entire market shows yet again how choppy trade has been as investors try to understand the lingering impact of the coronavirus on inflation, the wider economy and businesses ranging from airlines to banks. The broader market has managed to continue to gain ground even with all the churn rate, and the benchmark S&P 500 has set several records in recent weeks.
The spread of the more contagious Delta variant of COVID-19 has become a matter of concern for investors and policymakers. The United States Centers for Disease Control and Prevention has said that about 83% of cases in the United States are linked to the Delta variant of the virus. While tens of millions of Americans have been vaccinated, a significant percentage of them are either reluctant or downright hostile to the idea of doing so.
Last weekend, Los Angeles Country reinstated an indoor mask warrant as the region’s infection rate rose rapidly again. Other parts of the country, such as southern Missouri, are inundated with COVID-19 cases that are again straining hospitals.
Bond yields fell sharply on Monday, fearing the strong economic recovery from the pandemic could be threatened by additional lockdowns or cases of coronavirus. The 10-year Treasury bill yield fell to 1.14% early Tuesday, but reversed course to 1.21% from 1.18% the day before. Just a week ago, the 10-year note was trading at a yield of 1.33%.
“We’re seeing a more dramatic expansion of what we’ve been through over the past two weeks, which is really the market looking for a narrative,” said Yung-Yu Ma, chief investment strategist at BMO Management. of heritage.
Investors are looking for any clues they can get to better assess the continued trajectory of the economic recovery. Everything from the Federal Reserve’s comments to business outlook and economic data is used to get a clearer picture of what the economy might look like throughout the year and into 2022.
Wall Street is also in the middle of the earnings season. IBM rose 1% after the company reported better-than-expected revenue and profits, helped by its cloud computing business. Hospital operator HCA Healthcare jumped 14% after handily beating Wall Street earnings and income forecasts in the second quarter.
Outside of profits, drug distributors have made great strides following reports they are on the verge of a $ 26 billion settlement in opioid lawsuits. AmerisourceBergen rose 3.7% and McKesson rose 2.9%.
Paint and coatings maker PPG Industries fell 4.6% after second quarter profit fell below analyst expectations and faced supply chain issues and higher prices raw material.