U.S. stocks jumped on Tuesday as optimism that the Trump administration could move to ease lockdowns from the coronavirus overshadowed worrying earnings reports from JPMorgan and Wells Fargo. Canada’s TSX also rose, but gains underperformed Wall Street as crude oil prices tumbled.
White House adviser Larry Kudlow said President Donald Trump would make a number of announcements about re-opening 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 re-start businesses lies with them.
New York’s total hospitalizations fell for the first time since the onset of the novel coronavirus pandemic, Governor Andrew Cuomo said.
“The market is going up on prospects of the economy reopening soon and also the coronavirus (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 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 brought business activity to a halt.
JPMorgan Chase & Co and Wells Fargo & Co reversed early gains to end lower. 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.
The Nasdaq registered a fourth straight day of gains, and Amazon.com rose more than 5%.
Canada’s main stock index resumed its climb in a broad-based rally despite another drop in crude oil prices since the U.S. brokered a supply cut deal.
The S&P/TSX composite index closed up 182.49 points at 14,258.43.
The May crude contract was down US$2.30 at US$20.11 per barrel and the May natural gas contract was down 7.4 cents at US$1.65 per mmBTU.
The June gold contract was up US$7.50 at US$1,768.90 an ounce and the May copper contract was up 2.7 cents at US$2.33 a pound.
Read more: Market movers: Stocks that saw action on Tuesday - and why
Reuters, The Canadian Press
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