Dow Pares Gain, but Signs of Economic Recovery Keep Bulls Alive By Investing.com

Wall Street Rides Financials Higher to Claw Back Losses By


© Reuters.

By Yasin Ebrahim

Investing.com – The Dow closed higher despite paring some gains Tuesday, as investor sentiment was lifted by data suggesting the economy is on the road to recovery, but gains were kept in check by lingering fears a second wave of the Covid-19 pandemic could be ahead following a sharp uptick in infections in the U.S. and other parts of the world. 

The rose 1.83%, or 471 points, though had climbed by 838 points intraday. The gained 1.91%, while the added 1.75%.

Retail sales surged 17.7% in May, rebounding from a record slump in April. The better-than-expected data suggested that consumer spending is on the mend, though some on Wall Street remained wary over whether the momentum was likely to continue.

“The comeback was much faster than expected, and looks like a beginning of a v-shaped recovery in consumer spending. That’s assuming the positive momentum is sustained, something we remain skeptical about,” Jefferies (NYSE:) said in a note.

Retailers including Macy’s (NYSE:), Gap (NYSE:) and Nordstrom (NYSE:) surged on the back of the strong retail sales report.

Monetary policy was also in focus as Federal Reserve chairman Jerome Powell cooled some hopes that the central bank’s corporate bond-buying program, which kicked off today, would be aggressive.

Powell also touted signs of a recovery, though continued to stress that the outlook remains uncertain amid a lack of visibility about the trajectory of the disease. “Until the public is confident that the disease is contained, a full recovery is unlikely.”

Virus hospitalizations in Texas rose 8.3% overnight to hit a record. Florida’s Department of Health on Tuesday reported that daily infections rose 2,783 overnight to a record high in the state.

In China, meanwhile, a wave of infections in Beijing forced the government to impose stricter measures, including the shut down of all schools, to curb the outbreak. 

Hopes of an effective coronavirus treatment were given a boost, meanwhile, after researchers in the U.K. released clinical data showing that steroid, Dexamethasone, had reduced deaths among the sickest Covid-19 patients.  Dexamethasone reduced the death rate of patients on a ventilator by 35%, and by 20% for patients who needed oxygen but were not ventilated, according to the study. 

The results were “very positive,” but still need to be validated, Scott Gottlieb, a former commissioner of the U.S. Food and Drug Administration, told CNBC.   

Energy led the broader market gains, underpinned by a rise in oil prices after the International Energy Agency lifted its oil demand forecast for 2020.  

The IEA upgraded its estimate on oil demand to 91.7 million barrels per day (bpd) in 2020, 500,000 bpd higher than its previous forecast.

In technology, Apple (NASDAQ:) climbed 2.6% after Citigroup (NYSE:) increased its price target on the stock to $400 per share from $310 per share, citing numerous tailwinds, including upside from tech giant’s wearables business.

Elsewhere, industrials and construction stocks were pushed higher on reports that the Trump administration is preparing $1 trillion infrastructure program to spur economic growth.



Source link

Investing.com


Leave a Reply

Your email address will not be published. Required fields are marked *


About us

InvestLab is a financial services technology company focused on the global trading market. Founded in 2010 in Hong Kong, the company develops trading, market data, and social research products that enable individual investors and small to mid-size brokers to access global markets. We provide brokers and financial institutions cross border capabilities for retail investors into 43 markets globally.


CONTACT US

CALL US ANYTIME