Dow Rises 200 Points As JPMorgan, Wells Fargo Jumpstart Earnings Season

By | July 14, 2020


Major banks kicked off earnings season Tuesday morning, leading the market higher, but gains were capped by a decline in big tech stocks and ongoing concerns about a record number of new coronavirus cases in the United States.


The Dow Jones Industrial Average was up 0.8%, over 200 points, on Tuesday, while the S&P 500 rose 0.1% and the tech-heavy Nasdaq Composite lost 0.8%.

Shares of JPMorgan jumped more than 1% after the bank reported better-than-expected second quarter earnings, boosted by a 79% surge in trading revenue.

Shares of Wells Fargo, on the other hand, dropped more than 8% after the bank reported a $ 2.4 billion loss—its first quarterly loss since the 2008 financial crisis—and slashed its dividend to 10 cents per share.

Tech stocks, which boosted the market higher for much of last week, declined again on Tuesday: Facebook, Amazon, Netflix, Microsoft and Google-parent Alphabet all saw their shares move lower.

The stock market continues to largely hold steady despite a backdrop of surging coronavirus infections across the country: The U.S. reported record numbers of daily new cases last week, with many states now rolling back reopening plans.

California is ordering some indoor businesses like restaurants and bars to re-close statewide as new cases continue to spike, while Florida on Sunday saw a massive 15,000 new cases, the highest single day total for any state so far.

Crucial quote

“Given the nonstop rally of late in the Nasdaq and earnings season on the horizon,” the latest reversal in stocks “should at least serve as a reality check that the market isn’t a one-way street,” Bespoke Investment Group said in a recent note.

Surprising fact

Corporate profits are expected to plunge 44% in the second quarter, according to Refinitiv data. That would be the worst drop since the fourth quarter of 2008, when corporate profits declined by 67%.

Key background

The S&P briefly turned positive for the year before closing lower in Monday’s volatile trading session. The Dow gave up a 500-point gain before ending the day up only 10 points. Much of the sell-off can be attributed to a rollover in big tech stocks, which had helped boost the market higher in recent weeks—with the Nasdaq hitting several record highs last week.

Further reading

Big Tech Stocks Are Soaring—Here’s Why That Could Spell Trouble For The Market (Forbes)

Tesla On Verge Of Joining S&P 500—And The Stock Could Skyrocket Further (Forbes)

Dow Jumps 350 Points After Gilead Says Remdesivir Coronavirus Treatment Reduces Risk Of Death (Forbes)

Dow Falls 350 Points Amid Renewed Coronavirus Fears And Worrying Economic Outlook (Forbes)

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