Written by DAMIAN J. TROISE and ALEX VEIGA AP Business Writers, STAN CHOE
(AP) — The stock market shook off a weak start and ended broadly higher after pinballing through another day of unsettled trading. The S&P 500 rose 1.3% Tuesday. It had been down nearly 1% in the early going. The gains accelerated as the day went on. The Dow Jones Industrial Average rose 2.1%, lifted by gains for UnitedHealth Group and Caterpillar, among others. The bumpy trading followed another turbulent day Monday, when stocks veered from an early gain to a loss after California brought back restrictions on its economy amid a jump in coronavirus counts.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story appears below.
Wall Street is ticking higher Tuesday afternoon after pinballing through another day of unsettled trading.
The S&P 500 was up 0.8%, as of 3 p.m. Eastern time, after erasing an earlier loss of 0.9%. It follows up on Monday’s turbulence, when stocks veered from an early gain to a loss after California brought back restrictions on its economy amid a jump in coronavirus counts.
The Dow Jones Industrial Average was up 442 points, or 1.7% at 26,528, lifted by gains for UnitedHealth Group and Caterpillar, among others. Big tech-oriented stocks were turning in mixed performances, though, which helped hold the Nasdaq composite to a more modest gain of 0.3%.
The latest erratic moves come as earnings reporting season kicks off for the market, and three of the nation’s biggest banks painted a mixed picture of how badly the coronavirus pandemic is ripping through their businesses.
“The earnings season is off to a very guarded start,” said J.J. Kinahan, chief market strategist at TD Ameritrade.
He pointed to cautious forecasts from companies that see the economy possibly taking a step back because of worsening COVID-19 trends, or at least taking longer to recover than expected.
“The fact that they are prepared for bad scenarios is helping to give the market a little confidence,” he said.
Like the broader market, financial stocks drifted between gains and losses for much of the day before turning higher in the afternoon. JPMorgan Chase, Wells Fargo and Citigroup said they collectively set aside nearly $27 billion during the second quarter to cover loans potentially going bad due to the recession.
But investors took very different approaches to each of them. JPMorgan Chase, the nation’s biggest bank, was up 0.6% after it said it made a record amount of revenue from April through June. Its profit for the latest quarter also managed to beat analysts’ expectations, even though it roughly halved from year-ago levels.
Wells Fargo, though, dropped 4.9% after it said it expects to cut its dividend. “Our view of the length and severity of the economic downturn has deteriorated considerably,” CEO Charlie Scharf said.
Citigroup fell 3.5% after CEO Michael Corbat said its overall business performance was strong last quarter, though net income dropped 73% from a year ago largely due to the $7.9 billion it had to set aside for loans potentially going bad.
Delta Air Lines lost 2.3% after its earnings and revenue for the latest quarter fell short of Wall Street’s already very low expectations. The pandemic is keeping fliers on the ground, and Delta’s passenger count plunged 93% during the quarter from a year earlier. CEO Ed Bastian said it could be two years before the airline sees a sustainable recovery.
Stocks have mostly churned in place since early June. That’s when the S&P 500 pulled back within 4.5% of its record high set in February, after earlier being down nearly 34%. The index is now 6% below its record.
Pulling stocks higher has been a budding economic recovery, with the job market, retail sales and other measures of the economy halting their plunge and beginning to resume growth. Underlying it all is massive aid for the economy from central banks and governments around the world.
But pushing stocks down are accelerating coronavirus counts in hot spots around the world, which threatens to halt the recovery just as it got going.
California demonstrated on Monday how dangerous that can be when the governor of the country’s largest state economy once again ordered bars, indoor dining and other businesses closed.
The worry is that the continuing pandemic could push states across the Sun Belt to roll back reopenings of their economies.
That’s why COVID-19 trends — along with the potential for more aid for the economy from Congress — will matter much more for markets in upcoming weeks than what companies say about their second-quarter results, said Keith Buchanan, portfolio manager at Global Investments.
“The progression of the virus should still be front and center for what is dictating and going to continue to dictate our prospects for economic growth going forward,” he said.
The stock market’s gains were relatively widespread in Tuesday afternoon trading, after it pulled out of its weak start. Smaller stocks were doing better than the rest of the market, with the small-cap Russell 2000 index up 1%.
And four out of five of the big stocks in the S&P 500 were higher. Energy companies, raw-material producers and other companies whose profits desperately need the economy to strengthen were leading the way.
In Europe, France’s CAC 40 fell 1%, and Germany’s DAX lost 0.8%. The FTSE 100 in London added 0.1%.
In Asia, Japan’s Nikkei 225 fell 0.9%, South Korea’s Kospi slipped 0.1% and Hong Kong’s Hang Seng dropped 1.1%.
The yield on the 10-year Treasury dipped to 0.61 from 0.62% late Monday. It tends to move with investors’ expectations of the economy and inflation.
Benchmark U.S. crude oil rose 19 cents to settle at $40.29 per barrel. Brent oil, the international standard, rose 18 cents to $42.90 a barrel.