Stocks - Dow Makes Comeback as Rallying Banks Trigger Turnaround
Investing.com
Published May 14, 2020 03:59PM ET
By Yasin Ebrahim
Investing.com – The Dow made an impressive comeback on Thursday, bouncing back from deep losses, led by a surge in financials, even as U.S.-China tensions flared up again and millions more Americans filed for unemployment.
The Dow Jones Industrial Average rose 1.62%, or 377 points, but had been down by as many 570 points at the lows of the day. The S&P 500 gained 1.15%, while the Nasdaq Composite added 0.91%.
A jump in financials stocks turned the tide of selling to buying as traders seemingly swooped for beaten-down bank stocks, even as the fears of a deep recession and longer-than-expected recovery threaten to ramp-up defaults in the coming months.
JPMorgan Chase (NYSE:JPM) and Bank of America (NYSE:BAC) closed more than 4% higher, while Wells Fargo (NYSE:WFC) jumped 6.9% following a report of speculation it could merge with Goldman Sachs (NYSE:GS).
But the economic backdrop is hardly supporting the bull case in markets, as the latest surge in weekly jobless claims means that now one in four working Americans are claiming unemployment benefits.
The U.S. Department of Labor reported Thursday that initial jobless claims were 2.981 million for the week ended May 9, above economists' forecasts of 2.5 million.
Just a day earlier, Federal Reserve Chairman Jerome Powell said he expected unemployment would likely peak over the next month.
Tech stocks, meanwhile, also recovered losses as Facebook (NASDAQ:FB) and Google (NASDAQ:GOOGL) turned positive, with chip stocks also catching a bid.
Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD) and Micron Technology (NASDAQ:MU) were among the biggest gainers.
Elsewhere, Microsoft (NASDAQ:MSFT) climbed 0.5% after it acquired Metaswitch Networks as the tech giant looks to bolster its move into telecommunications.
Energy stocks were supported by rising oil prices after the International Energy Agency touted an improved outlook in the wake of easing coronavirus restrictions, though it warned that any resurgence in infections would pose a major risk to oil demand.
Elsewhere, Boeing (NYSE:BA) ended up 0.75% higher, cutting its intraday losses even as Delta Air Lines (NYSE:DAL) said it will "permanently retire" its fleet of 18 Boeing 777 aircraft by the end of the year as part of efforts to cut costs.
Get The News You Want
Written By: Investing.com
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.