A very good day for the market today with the Dow jumping 556 points as investors rotated into value with a mass buying spree of energy, industrials, materials and staples, all this despite terrible COVID news of California shutting down and Florida having another record spike.  The first of Q2 saw JP Morgan delivering the good news of a smaller than forecast drop in profits but Wells Fargo reporting their first earnings loss since 2008. Citigroup also came in with a steep fall in earnings overall dropping the bank index 1.2 percent.  Though the markets have now reclaimed most of their pandemic related losses since March, the surges and problems, particularly in California and Florida, has created uncertainty about the economic recovery.  The good news is the Nasdaq continues to rise swimmingly.  After the dive on Monday with investors thinking the tech bull run was over, there was an impressive rebound today. One other news items that boosted the market was Moderna taking its promising vaccine to final trials as early as July 27^th.  Volume was again below recent averages at 10.7 billion. 

tue  JULY 14, 2020 / 4:54 pm 

Wall Street surges, led by energy and materials

Noel Randewich

                DJ: 26,085.80  +10.50      NAS: 10,390.84  -226.60      S&P: 3,155.22  -29.82      7/13

DJ: 26,642.59  +556.79    NAS: 10,488.58  +97.73       S&P: 3,197.52  +42.30     7/14

(Reuters) - Wall Street surged on Tuesday, with the Dow Jones Industrial Average ending more than 2% higher as investors bought energy and materials stocks and looked beyond a recent rise in coronavirus cases.  The S&P 500 energy, materials and industrial indexes jumped more than 2%, while health, technology and consumer staples each rose more than 1%.

Amazon slipped 0.6%. It and other recently strong performing technology and growth stocks, including Facebook and Netflix, recovered from deeper losses, giving the Nasdaq a last minute spurt.  “Today is counterintuitive. We are reading about California’s economy shutting down and a record spike in cases in Florida, and yet you have energy stocks leading,” said Bob Shea, chief executive officer at TrimTabs Asset Management in New York. “We’re seeing a mini-rotation into value.”

JPMorgan Chase & Co, the largest U.S. lender, rose 0.6% after it posted a smaller-than-expected 51% drop in second-quarter profit.  Wells Fargo & Co tumbled 4.6% after booking a quarterly loss for the first time since the 2008 financial crisis. Citigroup Inc dropped 3.9% after it reported a steep fall in quarterly profit.  The S&P 500 banks index dropped 1.2% as the three banks set aside a combined $28 billion to cover potential losses on loans to borrowers hurt by the coronavirus pandemic.

Wall Street has reclaimed most of its coronavirus-driven losses since March as a raft of monetary and fiscal stimulus and upbeat economic data raised hopes of a swift post-pandemic recovery.  But a recent record surge in COVID-19 cases and new business restrictions, particularly in California, has again raised uncertainty about how it may take for the economy to recover.  Alabama, Florida and North Carolina reported record daily increases in COVID-19 deaths on Tuesday.

Following a drop of more than 2% in the Nasdaq on Monday, some investors had worried that Wall Street’s recent rally might be ending. With Tuesday’s quick rebound, the Nasdaq has gone two months without suffering two days in a row of declines.  Investors are bracing for what could be the sharpest drop in quarterly earnings for S&P 500 firms since the 2008 financial crisis, according to Refinitiv IBES data.

The Dow Jones Industrial Average surged 2.13% to end at 26,642.59 points, while the S&P 500 gained 1.34% to 3,197.52.  The Nasdaq Composite added 0.94% to 10,488.58.

Delta Air Lines Inc dropped 2.65% after it warned it will be more than two years before the industry sees a sustainable recovery from the “staggering” impact of the coronavirus pandemic, with demand largely tracking the curve of infections in different places.  Moderna Inc jumped 4.5% after it said it plans to start a late-stage clinical trial for its COVID-19 vaccine candidate on or around July 27.

Advancing issues outnumbered declining ones on the NYSE by a 1.92-to-1 ratio; on Nasdaq, a 1.63-to-1 ratio favored advancers.  The S&P 500 posted seven new 52-week highs and no new lows; the Nasdaq Composite recorded 35 new highs and 31 new lows.

Volume on U.S. exchanges was 10.7 billion shares, compared with the 11.8 billion average for the full session over the last 20 trading days.