Stocks Rebound Dramatically From Monday's Disaster
Early Tuesday morning, stock market futures were higher, suggesting that Wall Street was on track to recover some of the previous session's severe losses as increasing COVID-19 infections reassert themselves and ricochet throughout global markets.
Even though increasing COVID-19 infections have reasserted themselves and are ricocheting throughout global markets, stocks rose in early Tuesday trade, with Wall Street trying to recover some of the previous session's severe losses. At the time of this writing, the market has rebounded 517 points.
Fears about the rapidly spreading Delta variety triggered a widespread sell-off on Wall Street on Monday, sending investors seeking protection to the bond market. The Dow fell more than 700 points on Monday.
Investors are concerned about the robustness of the economic recovery due to the highly infectious COVID-19 Delta strain, which is causing an increase in new illnesses and fatalities, almost entirely among those who have not been vaccinated.
President Joe Biden appealed to Americans to be vaccinated.
You are not protected if you are not immunized.
So please, please, please be vaccinated as soon as possible.
It is secure, it is free, and it is convenient.
The Dow Jones Industrial Average finished the day down 2%, its lowest day in almost nine months.
The S&P 500 fell by 1.6 percent.
The Nasdaq had the smallest decline, dropping 1 percent.
Although increasing COVID-19 infections have reasserted themselves and are ricocheting throughout global markets, stocks rose in early Tuesday trade, with Wall Street trying to recover some of the previous session's severe losses. At the time of this writing, the market has rebounded 517 points.
On Monday, key benchmarks experienced their biggest losses since the beginning of 2021, eclipsing quarterly results that have almost consistently indicated a robust recovery in recent months.
In response to the increasing number of cases caused by the Delta variant of COVID-19, which is a more communicable form of the virus, the Nasdaq and the S&P 500 experienced their biggest drops in nearly two months, and benchmark Treasury yields experienced their biggest decline in more than three months as investors sought shelter from the uncertainty.
The Dow's point loss was the most significant since October 2020.
On the other hand, investors were more optimistic in Tuesday's session, with several analysts noting that hospitalizations and fatalities haven't increased as drastically — and are much lower than they were during the worst days of the COVID-19 epidemic.
The major indexes rose, with the Dow Jones Industrial Average regaining more than 1 percent on the day as investors sought bargains.
Analyst Josh Jamner of Clear Bridge Investment Strategy told Yahoo Finance Live that there are some silver linings to the current situation.
"So far, hospitalizations have remained at a modest level.
It seems that the vaccinations are highly successful in protecting against this.
As a result, we have reason to be hopeful.
According to Bank of America statistics, second-quarter profits per share are tracking 3.5 percent above expectations, driven chiefly by financials, with increased guidance and better-than-expected topline results also contributing to the robust performance.
Despite this, and with a massive vaccine campaign underway, the continuing epidemic seems to be becoming more challenging to contain.
In this environment, investors are concerned that rising infection rates may result in a fresh wave of restrictions, similar to those that brought the economy to an abrupt stop last year.
Los Angeles officials have already reinstated indoor masking restrictions, foreshadowing what may come shortly therein.
Analysts are keeping a close eye on major industries that stand to lose the most if increasing infection rates result in additional restrictions.
According to David Bailin of Citi Global Wealth, an increase in coronavirus infections is unlikely to significantly affect industrials.
In contrast, "there is a considerable lot when it comes to leisure and services."
"And when it comes to worldwide reopening, that's also a substantial number," he said on Yahoo Finance Live on Thursday.
"That is what the market is now absorbing."
Corporate America's profit reports for the second quarter continued to surprise investors on the positive side, despite the background of rising demand and prices in the market.