Wall Street ends choppy session as strength in banks compensates for virus problems

New York (Reuters) – Major Wall Street indexes closed higher on choppy trading on Thursday, with bank stocks rising above the results of annual stress tests and helping to offset investor concern over alarming expectations. increases in new cases of coronavirus.

The recently battered S&P 500 subindex led the session winners after U.S. banking regulators relaxed the rules and investors awaited the results of the sector’s annual stress test, which helps determine policies for dividends.

The bank index had fallen 19 percent from its recent high on June 5 to its lowest point on Wednesday. It closed 3.6% on Thursday.

But investors remained nervous throughout the day as the number of new cases of the virus grew in the U.S. states, especially in the west and south.

Texas Governor Greg Abbott said he was halting his state’s gradual economic reopening in response to a jump in COVID-19 infections and hospitalizations.

And stocks temporarily faltered at the end of the session after Apple Inc. said it would close 14 stores in Florida again due to the increase in COVID-19 cases after other closings in Houston, Arizona, South Carolina, and South Carolina. North.

An outbreak of virus cases in recent days has taken the breath away from a Wall Street rally fueled by hopes for a rapid economic recovery and massive government stimulus efforts. However, the benchmark S&P 500 index still closed less than 9% below its February 19 record.

While bank stocks provided one of the biggest gains on Thursday, Michael James, managing director of equity trading at Wedbush Securities in Los Angeles, said investors were buying the fall after a pullback in stocks on Wednesday.

“None of those problems that caused yesterday’s weakness were actually resolved today,” James said. “It could be argued that the market could be much smaller. The reason we are not is that there is still some understanding that things will have a brighter ending at some point. ”

FILE PHOTO: The Fearless Girl statue is seen off the New York Stock Exchange (NYSE) in New York City, New York, USA, June 11, 2020. REUTERS / Brendan McDermid

The Dow Jones Industrial Average rose 299.66 points, or 1.18%, to 25,745.6, the S&P 500 gained 33.43 points, or 1.10%, to 3,083.76, and the Nasdaq Composite added 107.84 points, or 1.09%, to 10,017.00.

The top three indices opened Thursday’s session lower after data showed that the number of Americans filing claims for unemployment benefits fell less than expected last week, likely as the second wave of layoffs offset hiring part when reopening businesses.

But the S&P financial sector, up 2.7%, remained strong throughout the session and was S&P’s top percentage winner. Previously, regulators unveiled two rules that ease restrictions that cover large banks with complex trade and investment portfolios.

The Federal Reserve was due to publish the results of annual bank stress tests after markets close, which could indicate how much flexibility banks will have to return capital to shareholders.

“The risk-reward bias favors a more positive bias in the results this afternoon because the sector has lagged so far behind,” said James of Wedbush.

The energy sector gained 1.9% as oil prices rose 2% on the day. [O/R] Defensive public services was the weakest S&P sector with a 1.2% decrease.

Walt Disney Co, down 0.63%, cut losses, but still closed for the second day in a row after it delayed the reopening of theme parks due to the health crisis. A report also said it was considering postponing the July 24 release of “Mulan.”

Boeing Co fell 1% when rival Airbus hit a crucial aircraft production target and smoothed out recent industrial problems.

Forward issues outnumbered declining issues on the New York Stock Exchange by a ratio of 1.81 to 1; on Nasdaq, a ratio of 2.00 to 1 favored the overtakers.

FILE PHOTO: Traders exit Gate 11 Wall St. of the New York Stock Exchange (NYSE) in New York City, New York, USA, June 11, 2020. REUTERS / Brendan McDermid

The S&P 500 posted five new 52-week highs and no new lows; The Nasdaq Composite recorded 63 new highs and eight new lows.

On the US exchanges, 11.38 billion shares changed hands compared to the average of 13.32 billion in the last 20 sessions.

Additional reports by Chuck Mikolajczak and Stephen Culp in New York, Medha Singh and Devik Jain in Bangalore; Edition by Cynthia Osterman

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