Dow soars 557 points, energy, materials drive broad gains

JPMorgan and Citigroup earnings were bolstered by trading

U.S. equity markets turned in a broad rally on Tuesday as money poured into some of the more economically-sensitive sectors, such as energy and materials, despite evidence the banks are prepared for the harshest economic downturn since the Great Depression to worsen.

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TickerSecurityLastChangeChange %
I:DJIDOW JONES AVERAGES27976.84+289.93+1.05%
SP500S&P 5003380.35+46.66+1.40%
I:COMPNASDAQ COMPOSITE INDEX11012.238958+229.42+2.13%

The Dow Jones Industrial Average gained 557 points, or 2.14 percent, while the S&P 500 rose 1.34 percent, wiping out earlier losses. The tech-heavy Nasdaq Composite climbed 0.94 percent.

TickerSecurityLastChangeChange %
CATCATERPILLAR INC.142.57+0.04+0.03%
XOMEXXON MOBIL CORPORATION44.09-0.01-0.02%

Looking at stocks, Caterpillar and ExxonMobil were among the names that powered the Dow.

JPMorgan Chase & Co.’s second-quarter profit was cut in half from a year ago, but the lender reported better-than-expected earnings amid double-digit growth in stock and bond trading as COVID-19 whipped up market volatility.

Citigroup Inc. also outpaced estimates as strong trading results more than offset weakness in the consumer banking business. Still, both lenders set aside more money to cover loan defaults in the event the pandemic worsens.

Wells Fargo & Co. lost $2.4 billion and said it would cut its quarterly dividend to 10 cents per share, down from 51 cents.

TickerSecurityLastChangeChange %
JPMJP MORGAN CHASE & CO.102.94-0.88-0.85%
CCITIGROUP INC.53.35-0.41-0.76%
WFCWELLS FARGO & COMPANY25.19-0.13-0.51%

Elsewhere on the earnings front, Delta Air Lines Inc. recorded $3.2 billion in charges related to the COVID-19 pandemic as traffic slid 85 percent.

Meanwhile, aerospace giant Boeing Co. was awarded a $22.8 billion contract to manufacture F-15EX advanced fighter jets.

TickerSecurityLastChangeChange %
DALDELTA AIR LINES INC.29.09-0.55-1.86%
BABOEING COMPANY175.44-4.69-2.60%

Defense contractor Lockheed Martin Corp. faces Chinese sanctions after the U.S. approved the sale of $620 million of missile parts to Taiwan.

Tesla shares were given a $2,322 price target -- a Wall Street high -- at Piper Sandler, which cited recent share gains and an improving margin outlook due to its software.

TickerSecurityLastChangeChange %
LMTLOCKHEED MARTIN CORPORATION392.44+0.48+0.12%
TSLATESLA INC.1,554.76+180.37+13.12%

On the economic data front, the consumer price index rose 0.6 percent month-over-month in June, slightly ahead of the 0.5 percent gain that was expected.

Meanwhile, core prices -- which exclude food and energy -- jumped 0.2 percent from the previous month, above the 0.1 percent increase that analysts were anticipating.

Looking at commodities, West Texas Intermediate crude oil rose 13 cents to $40.23 a barrel while gold slipped 40 cents to $1,810.60 an ounce.

U.S. Treasurys ticked higher, pushing the yield on the 10-year note down by 3 basis points to 0.61 percent.

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European markets ended mixed, with France’s CAC down 0.96 percent and Germany’s DAX off 0.8 percent while Britain’s FTSE ticked up 0.06 percent.

Markets were lower across the board in Asia as Hong Kong’s Hang Seng lost 1.14 percent, Japan’s Nikkei slid 0.87 percent and China’s Shanghai Composite slid 0.83 percent.