Wall Street waves, led by energy and materials

(Reuters) – Wall Street rose on Tuesday, with the Dow Jones Industrial Average finishing more than 2% higher when investors bought energy and materials stocks and looked beyond a recent surge in coronavirus cases.

In widespread trade, Moderna Inc increased 18% after the biotech company’s experimental vaccine for COVID-19 showed it to be safe and elicited immune responses in an ongoing early-stage study.

Extended trading in S&P 500 emini futures suggested that investors expect Wall Street to rise on Wednesday, with futures rising 0.8%. Shares of airlines, cruise lines, hotel operators and concert promoters also rose after the report by US researchers on the Modern vaccine study.

In Tuesday’s regular trade, the S&P 500’s energy, materials and industrial indices increased more than 2%, while health, technology and consumer staples increased more than 1%.

Amazon.com Inc ended down 0.6%. A recovery from deeper losses by Amazon and other tech and growth stocks that have recently performed strongly, including Facebook and Netflix, gave Nasdaq a last-minute outbreak.

“Today is counterintuitive. We are reading about the shutdown of the California economy and a record peak in Florida cases, and yet you have leading energy stocks, ”said Bob Shea, CEO of TrimTabs Asset Management in New York. “We are seeing a mini rotation in value.”

JPMorgan Chase & Co, the largest lender in the US, was up 0.6% after posting a 51% drop in second-quarter earnings less than expected.

Wells Fargo & Co fell 4.6% after posting a quarterly loss for the first time since the 2008 financial crisis. Citigroup Inc fell 3.9% after reporting a sharp drop in quarterly earnings.

The S&P 500 bank index fell 1.2% as the three banks set aside a combined total of $ 28 billion to cover possible loan losses to borrowers affected by the coronavirus pandemic.

Wall Street has recovered most of its coronavirus-driven losses since March, as a series of monetary and fiscal stimuli and optimistic economic data raised hopes for a rapid post-pandemic recovery. But a recent record surge in COVID-19 cases and new trade restrictions, particularly in California, have created new uncertainty about how long it can take for the economy to recover.

Alabama, Florida and North Carolina reported record daily increases in COVID-19 deaths on Tuesday.

After a fall of more than 2% on the Nasdaq on Monday, some investors were concerned that the recent Wall Street recovery may be ending. With Tuesday’s fast rebound, Nasdaq has gone two months without suffering two straight days of declines.

For a graph on the growing potential economic impact of COVID-19:

here

Investors prepare for what could be the biggest drop in quarterly earnings for S&P 500 companies since the 2008 financial crisis, according to data from Refinitiv IBES.

The Dow Jones Industrial Average rose 2.13% to finish at 26,642.59 points, while the S&P 500 gained 1.34% to 3,197.52. The Nasdaq compound added 0.94% to 10,488.58.

Delta Air Lines Inc ended with a 2.65% drop after warning that it will be more than two years before the industry sees a sustainable recovery from the “staggering” impact of the coronavirus pandemic, with demand largely tracking the infection curve in different places.

Forward issues outnumbered declining issues on the New York Stock Exchange by a ratio of 1.92 to 1; on Nasdaq, a ratio of 1.63 to 1 favored the overtakers.

The S&P 500 posted seven new 52-week highs and no new lows; The Nasdaq Composite recorded 35 new highs and 31 new lows.

Volume on the US exchanges was 10.7 billion shares, compared to the 11.8 billion average for the full session in the last 20 trading days.