(Reuters) – 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.
White House adviser Larry Kudlow said Trump would make a number of “key, vital” 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.
“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.
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 (JPM.N) and Wells Fargo & Co (WFC.N) fell 3.4% and 4.4% respectively, after rising in early trading, as first-quarter profits plunged with both banks setting aside billions of dollars to cover potential loan-losses from the pandemic.
Coronavirus-fueled uncertainty also forced Johnson & Johnson (JNJ.N) to cut its 2020 adjusted profit forecast, but its shares rose 4.1% as it boosted its quarterly dividend, signaling financial stability at a time when a slate of blue-chip firms have suspended dividends to shore up cash reserves.
“The ‘turned the corner’ narrative has a strong immediacy, but there remain creeping concerns about a slow economic re-opening and lasting changes to consumer spending,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management in Portland, Oregon.
At 11:48 a.m. ET, the Dow Jones Industrial Average .DJI was up 422.36 points, or 1.81%, at 23,813.13, the S&P 500 .SPX was up 60.41 points, or 2.19%, at 2,822.04 and the Nasdaq Composite .IXIC was up 241.14 points, or 2.94%, at 8,433.56.
A 4.2% jump for Apple Inc (AAPL.O) 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 Inc (TSLA.O) surged 11.5% and was among the top boosts to the Nasdaq after brokerage Credit Suisse upgraded the electric carmaker’s stock to “neutral”.
The S&P 1500 airlines index .SPCOMAIR gained 4.7% as sources said some large U.S. passenger airlines were close to accepting the terms of a $25 billion offer for government payroll aid.
Advancing issues outnumbered decliners more than 3-to-1 on the NYSE and 2-to-1 on the Nasdaq.
The S&P index recorded seven new 52-week highs and no new low, while the Nasdaq recorded 21 new highs and four new lows.
Reporting by Medha Singh and Akanksha Rana in Bengaluru; Editing by Sagarika Jaisinghani and Shounak Dasgupta