Stocks Jumps On Bargain Hunting: Dow Soars 550 Points
4:12 pm Tuesday, July 20th, 2021
U.S. stocks rebounded Tuesday as investors rushed in to buy shares that had been knocked down in Monday’s dramatic selloff.
All 11 S&P 500 sectors were trading higher, led by financials (+3.1%) and industrials (+2.7%), after each closed lower yesterday. Advancing issues outnumbered declining issues by a 5:1 margin at the NYSE after being outmatched 7:1 yesterday. The consumer staples sector (+0.1%) underperforms with a small gain.
In addition, IBM (IBM) reported better-than-expected earnings results, which has many investors hoping that other technology companies will report similar results in the coming days and weeks. Apple (AAPL) had its price target raised to $166 from $155 at UBS ahead of its earnings report next week.
Travelers (TRV), HCA Healthcare (HCA), and Dover (DOV) also exceeded quarterly expectations and are being rewarded.
As for the reported coronavirus/growth concerns, the bullish price action in stocks and the positive turnaround in Treasury yields have supported suspicions that commentary about the virus materially impacting growth have been overstated.
The 10-yr yield is up three basis points to 1.21% after dipping below 1.14% after a mixed Housing Starts and Building Permits report for June. Housing starts were better than expected, but building permits, which are a leading indicator, declined 5.1% m/m to a seasonally adjusted annual rate of 1.598 million (Briefing.com consensus 1.700 million).
PPG Industries (PPG), however, is keeping some investors humble after missing EPS estimates due to pervasive raw material supply disruptions caused by the virus, which PPG expects to persist through Q3. PPG shares are down 4.5%.
Total housing starts rose 6.3% month-over-month to a seasonally adjusted annual rate of 1.643 million (consensus 1.600 million). Building permits declined 5.1% month-over-month to a seasonally adjusted annual rate of 1.598 million (consensus 1.700 million).
