Expectations of COVID-19 Easing Spur Broad Rebound in New York Stock Market (Comprehensive)

The largest US bank, JP Morgan, announced better-than-expected earnings on the 14th.
[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The New York stock market showed a significant rise as expectations grew that the spread of the novel coronavirus infection (COVID-19) in California had passed its peak. In particular, the Dow Jones Industrial Average, centered on traditional stocks, surged with Caterpillar showing strong performance. Bank stocks that announced earnings showed a wide divergence in stock prices.

On the 14th (local time), the Dow Jones Industrial Average closed at 26,642.59, up 2.13% (556.79 points), the S&P 500 index rose 1.34% (42.30 points) to 3,197.52, and the Nasdaq closed at 10,488.58, up 0.94% (97.73 points).

On that day, the New York stock market started mixed amid banks' earnings announcements but gradually expanded gains and closed strong.

The decrease in new COVID-19 cases in California was evaluated as stabilizing investor sentiment. The number of new infections in California was 7,346, down from 8,358 the previous day. This was interpreted as a sign that the infection situation in California, which had suspended economic reopening measures a day earlier, was improving.

The number of new infections in Florida also fell below 10,000 to 9,194. This was also positive as it was lower than the seven-day average.

On the same day, Apple, Microsoft, and Facebook rose, but Amazon fell, showing mixed fortunes even among technology-related stocks. Tesla's stock, which had fallen more than 20% intraday the day before, also showed a rise of over 1%.

The Dow Jones Industrial Average's rise was led by Caterpillar. Caterpillar's stock price rose by 4%, and oil-related companies such as ExxonMobil and Chevron also surged by 3%.

Most bank stocks that kicked off the Q2 earnings season reported poor results, but some banks delivered better-than-expected performances.

JPMorgan, the largest bank in the U.S., posted a Q2 net profit of $4.69 billion due to provisions for potential loan losses. This was a 51.4% plunge from $9.65 billion in the same period last year but was still considered better than analysts' expectations. Improved performance in investment banking areas such as bonds and stocks was cited as the reason. JPMorgan's stock rose 0.57%.

Wells Fargo recorded a net loss of $2.4 billion in Q2, marking its first quarterly loss in over a decade since the global financial crisis. Wells Fargo's stock plunged 4.57%. Citigroup also set aside $7.9 billion for expected loan losses, causing its Q2 net profit to plummet 73%. Citigroup's stock also fell 3.98%.

August delivery West Texas Intermediate (WTI) crude oil closed at $40.29 per barrel, up 0.5% (19 cents) from the previous day. August delivery gold fell 0.04% (70 cents) to $1,813.40 per ounce.