U.S. stocks jumped on Tuesday as optimism that the Trump administration could move to ease lockdowns from the coronavirus outbreak overshadowed worrying earnings reports from JPMorgan and Wells Fargo.
White House adviser Larry Kudlow said President Donald Trump would make a number of announcements about reopening the U.S. economy in the next day or two as the health crisis appeared to be ebbing, although some state governors have said the decision to restart businesses lies with them.
In New York state, an epicenter of the pandemic, total hospitalizations fell for the first time since the onset of the novel coronavirus outbreak, according to Governor Andrew Cuomo.
The Nasdaq registered a fourth straight day of gains. Among its biggest boosts was Amazon.com, which rose 5.3% to $2,283.32, a record high close.
"The market is going up on prospects of the economy reopening soon and also the coronavirus (outbreak possibly) reaching some sort of peak," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
The market could be in store for further sharp selling in the coming months as data showing the extent of the economic damage from the virus is released, he said. "We're going to see (macroeconomic) numbers that are going to be frightening, and that will weigh."
Analysts have warned of a torrid earnings season as the containment measures have brought business activity to all but a halt.
Shares of JPMorgan Chase & Co and Wells Fargo & Co reversed early gains to end lower. Their first-quarter profits plunged, with both banks setting aside billions of dollars to cover potential loan losses from the pandemic.
The Dow Jones Industrial Average rose 558.99 points, or 2.39%, to 23,949.76, the S&P 500 gained 84.43 points, or 3.06%, to 2,846.06 and the Nasdaq Composite added 323.32 points, or 3.95%, to 8,515.74.
U.S. stocks have recovered in the past month after slumping more than 30% from their February record highs, helped by monetary and fiscal stimulus and the early signs of a plateau in the number of coronavirus cases. The S&P 500 is still down about 16% from its Feb. 19 record closing high.
In other earnings results, Johnson & Johnson climbed 4.5% 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.
Also boosting stocks, Apple Inc shares rose 5.1% as data showed iPhone shipments to China rebounded slightly in March after crashing in February.
Volume on U.S. exchanges was 12.01 billion shares, compared with the 14.58 billion-share average for the full session over the last 20 trading days.
Advancing issues outnumbered declining ones on the NYSE by a 3.19-to-1 ratio; on Nasdaq, a 2.54-to-1 ratio favored advancers.
The S&P 500 posted eight new 52-week highs and no new lows; the Nasdaq Composite recorded 25 new highs and 12 new lows.
GLOBAL MARKETS
Equity markets rallied globally on Tuesday as Chinese trade data defied expectations of a deep downturn as a result of the coronavirus pandemic, igniting hopes that world economies can soon recover and removing the safe-haven allure of the greenback.
Oil prices fell more than 6% as investors doubted that record supply cuts by the Organization of the Petroleum Exporting Countries and other producers would soon balance markets pummeled by the pandemic's blow to demand.
Gold soared nearly 2% and hit its highest since late 2012 as investors piled in to hedge against potential inflation and currency debasement resulting from massive central bank and government stimulus measures around the globe.
Data showed that China's exports fell only 6.6% in March from a year ago, far less than the expected 14% plunge. Imports fell 0.9% compared with expectations for a 9.5% drop.
Stocks rallied around the globe on the Chinese data and signs that sweeping lockdowns to contain the spread of the coronavirus were working. Still, the World Health Organization warned the epidemic has not yet peaked.
Spanish shares gained as much as 1.5% as some businesses reopened, but pulled back to close up 0.5% as European stocks also pared similar gains.
The rally on Wall Street shows investors are not concerned about current results as the corporate earnings season gets underway but are focused on the long-term value of each company's franchise, said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.
"Is it an all-clear signal?" said Ghriskey. "No, because I have difficulty in believing the market fully recovers until the timing of the economic recovery is visible, and we just don't know that timing."
Profits at JPMorgan Chase & Co and Wells Fargo & Co plunged in the first quarter, as the banks on Tuesday offered the first glimpse of the pandemic's impact on corporate America. Their shares fell -2.7% and -4.0%.
MSCI's All-Country World Index, which tracks shares across 49 countries, gained 2.43% and its emerging market stock index rose 1.49%.
On Wall Street, the Dow Jones Industrial Average rose 558.99 points, or 2.39%, to 23,949.76. The S&P 500 gained 84.43 points, or 3.06%, to 2,846.06 and the Nasdaq Composite added 323.32 points, or 3.95%, to 8,515.74, lifted by Amazon hitting a new record high.
Chinese shares gained, with the blue-chip index closing up 1.9%. Australian shares also rose 1.9%, Japan's Nikkei gained 3.1% and Hong Kong's Hang Seng 0.6%.
Oil prices remain more than 50% lower this year.
Commitments to cut global output by about 19.5 million barrels a day, including voluntary cuts that will happen gradually in places like the United States, will not be enough to reduce the growing worldwide supply glut, analysts said.
Brent futures fell $2.14 to settle at $29.60 a barrel while U.S. crude slid $2.30 to settle at $20.11.
The dollar index fell 0.527%, with the euro up 0.63% to $1.0982. The Japanese yen strengthened 0.53% versus the greenback at 107.23 per dollar.
Benchmark 10-year notes last fell 1/32 in price to yield 0.752%.
U.S. gold futures settled up 0.4% at $1,768.90 an ounce after earlier hitting their highest since February 2013 at $1,788.80. Spot gold jumped as much as 1.9% to $1,746.50.
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