US Airline Stocks Surge 8%... New York Stock Market Rebounds as Delta Variant Concerns Ease (Update)

[Image source=AP Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] Major indices on the New York stock market overcame concerns over an economic slowdown caused by the spread of the COVID-19 Delta variant and succeeded in rebounding.

On the 20th (local time), the Dow Jones Industrial Average rose 549.95 points (1.62%) to close at 34,511.99, the S&P 500 index increased by 64.57 points (1.52%) to 4,323.06, and the Nasdaq index rose 223.89 points (1.57%) to finish at 14,498.88.

The Dow, which had fallen 2% the previous day, recovered a significant portion of its losses, and the Nasdaq recorded a gain larger than the previous day's decline. The Wall Street Journal reported that the S&P 500's gain was the largest in four months.

On this day as well, the movement of major indices was linked to the direction of the U.S. 10-year Treasury yield. The 10-year Treasury yield, which had fallen to 1.12% in the morning, reversed to an upward trend and closed at 1.225%, up 0.04%.

Along with the rise in Treasury yields, the dollar also continued its strength. The dollar index rose 0.09% to 92.982, approaching the 93 level.

As the Treasury yield recovered to the 1.2% range, major New York stock indices expanded their rebound.

Major airline stocks, which had plunged due to concerns over reduced travel demand caused by the Delta variant spread, all surged by 8%.

Jimmy Chang, Chief Investment Officer at Rockefeller Global Family Office, explained, "Yesterday, investors' fear peaked, but today they realized the situation is not that bad."

Strong corporate earnings are also expected to support stock prices. Second-quarter earnings of companies included in the S&P 500 are expected to increase by 70% compared to the same period last year.

Dubravko Lakos-Bujas, JP Morgan investment strategist, said the recent stock price decline is short-term and forecasted that the S&P 500 index will rise to 4600 by the end of the year.

As risk asset investment sentiment revived, the Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as the "fear index," fell 2.77 points (12.31%) to 19.73.

West Texas Intermediate (WTI) crude oil prices, which had plunged 7.5% the previous day, closed at $67.42 per barrel, up $1 (1.5%). Although oil prices rebounded, the increase was limited.