The Dow rose more than 600 points on Tuesday, erasing most of a massive selloff that slammed the markets a day earlier on fears that the coronavirus’ new Delta variant could derail the economic recovery.
In mid-morning trading, the Dow Jones industrial average was up 592 points, or 1.7 percent, at 34,554. The S&P 500 was up almost 60 points or 1.4 percent higher than its Monday finish and the Nasdaq was up 185 points for a 1.3 percent gain.
That’s after the Dow closed 725 points lower Monday in a punishing session that was its worst since October, at one point shaving nearly 950 points off the blue-chip index in frenzied trades.
“A lot of investors are getting in on the dip,” Jim Paulsen, chief investment strategist at the Leuthold Group, told The Post. “Investors wanted to take advantage of how badly stocks got beaten back yesterday.”
Tuesday’s rally was the largest gain for the Dow in a month. The Dow briefly hit a new high above 35,000 last week and all major indices are up at least 14 percent year to date.
Travel stocks, which had been hit hard yesterday amid worries rising coronavirus cases could lead to more shutdowns, rebounded. Carnival, American Airlines and United Airlines were all up more than 5 percent mid-morning.
Energy stocks like Exxon and Chevron, which dropped yesterday on news the OPEC+ nations agreed to expand oil production, were off their lows.
But fears about coronavirus, economic growth, oil prices and inflation still remain.
Over the last week, new cases have climbed as the ultra-contagious Delta variant becomes the dominant strain. While cases are primarily spreading among populations with low vaccination rates, even states with a majority of residents vaccinated, like California, are implementing new restrictions.
And inflation rates are at their highest in 13 years, according to consumer price index data from June. A report released Friday from the University of Michigan shows consumers believe inflation will continue and even escalate — they estimate prices on goods will climb 4.8 percent over the next year.
Market analysts point to positive signs — like the fact most companies have reported strong earnings in the second quarter — as reason for optimism. But they’re still keeping an eye on coronavirus.
“I think the odds of another massive shutdown are low,” Paulsen says. “But coronavirus is still heating back up.”
Credit: Notigroup Newsroom.
[This article may have been written with information from various sources]