Stocks finished broadly higher Tuesday as investors assessed the bank earnings reports, went for traditional stocks like Caterpillar, and ran tech-sector stocks sharply lower and then into the black at the close.
The Dow Jones Industrial Average finished up 556 points, or 2.13%, to 26,642, and the S&P 500 was up 1.34%. The Nasdaq gained 0.94% after trading in and out of positive territory Tuesday.
Wells Fargo (WFC) - Get Wells Fargo & Company Report posted a wider-than-expected loss, its first since 2008, and slashed its dividend more than expected as the coronavirus pandemic continued to slam the lender.
Stocks had ended mostly lower Monday after California rolled back its reopening plans, with Gov. Gavin Newsom saying he would close indoor dining, bars and movie theaters after the state reported a record number of hospitalizations of people with the coronavirus.
“There’s an increasing sense that the recovery from the virus-related shutdown is going to be more drawn out, more uneven than maybe the market was looking for,” said Willie Delwiche, investment strategist at Baird.
JPMorgan reported stronger-than-expected second-quarter earnings but said it would suspend its share buyback plans through at least the end of September and set aside more than $10 billion to absorb potential losses on bad loans.
“Despite some recent positive macroeconomic data and significant, decisive government action, we still face much uncertainty regarding the future path of the economy," said JPMorgan Chief Executive Jamie Dimon. "However, we are prepared for all eventualities as our fortress balance sheet allows us to remain a port in the storm."
The bank reported a second-quarter loss of $2.4 billion, or 66 cents a share, a reversal from year-earlier earnings of $6.2 billion, or $1.30 a share.
Wells Fargo shares closed off 4.6% at $24.25.
Citigroup (C) - Get Citigroup Inc. Report posted better-than-expected second-quarter earnings as a surge in trading revenue helped offset a steep rise in credit loss provisions. Citi shares fell almost 4% to $50.15.
Delta Air Lines (DAL) - Get Delta Air Lines, Inc. Report posted a wider-than-expected second-quarter loss as the coronavirus pandemic and shutdown of most non-essential travel pummeled the airline industry. Delta Air shares gave up 2.7% to $26.11.
Consumer prices in the U.S. during June rose 0.6%, the most since August 2012, as parts of the U.S. economy reopened. CPI fell 0.1% in May.