Dow posts best quarter since 1987 as stocks rebound from coronavirus lows
Economic recovery hopes, more stimulus drive robust quarterly rally
The major U.S. stock indexes posted a strong rally during the final minutes of trading on Tuesday to end the quarter on a high note after fighting back from their coronavirus lows.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 44782 | -128.65 | -0.29% |
| SP500 | S&P 500 | 6047.15 | +14.77 | +0.24% |
| I:COMP | NASDAQ COMPOSITE INDEX | 19403.947849 | +185.78 | +0.97% |
The blue-chip Dow Jones Industrial Average rose 216 points or 0.85 percent while the S&P 500 climbed 1.54 percent and the Nasdaq Composite added 1.87 percent.
Late day comments from Senate Majority Leader Mitch McConnell on a potential Phase 4 stimulus plan helped serve as a catalyst, along with similar remarks from Treasury Secretary Steven Mnuchin.
For the quarter, the Dow posted its best performance in 33 years, gaining 17 percent while the S&P 500 rose 20 percent and the Nasdaq surged 30 percent.
On the economic front, June consumer confidence printed at 98.1, ahead of the 91.8 that analysts surveyed by Refinitiv were expecting.
Meanwhile, the number of daily new coronavirus cases in the U.S. continued to pull back from the peak reached last week, totaling 36,390 on Monday. Deaths due to the outbreak ticked up to 338 but remained near their lowest level since March 25.
Overnight, China passed national security legislation for Hong Kong, effectively ending the “One Party, Two Systems” governing principle that had been in place since the 1997 handover by Britain. The U.S. responded by revoking trade benefits that had been afforded to Hong Kong under the dual system.
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Looking at stocks, Wells Fargo will cut its 51-cent quarterly dividend to help offset damage to the bank’s earnings from COVID-19. The bank will announce the amount of its payout when it releases earnings on July 14. Rivals JPMorgan Chase, Citigroup, Bank of America, Morgan Stanley and Goldman Sachs said they would maintain their dividends.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| WFC | WELLS FARGO & CO. | 76.17 | -1.04 | -1.35% |
| JPM | JPMORGAN CHASE & CO. | 249.72 | -0.07 | -0.03% |
| C | CITIGROUP INC. | 70.87 | +0.71 | +1.01% |
| BAC | BANK OF AMERICA CORP. | 47.51 | -0.26 | -0.54% |
| MS | MORGAN STANLEY | 131.61 | +0.40 | +0.30% |
| GS | THE GOLDMAN SACHS GROUP INC. | 608.57 | +3.14 | +0.52% |
Royal Dutch Shell booked a $22 billion writedown due to declining demand for fuel as lockdowns to curb the spread of the pandemic choked off travel. The energy giant also lowered its oil price forecast to $35 a barrel for 2020 and $60 a barrel over the long term.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| RDS.A | NO DATA AVAILABLE | - | - | - |
Athletic-apparel maker Lululemon agreed to buy home fitness startup Mirror for $500 million. Mirror will operate as a standalone company within Lululemon after the completion of the deal, expected later this year.
Electric-vehicle producer Tesla is facing “tight” odds on breaking even in the second quarter due to the COVID-19 pandemic, according to the Associated Press, citing an e-mail CEO Elon Musk sent to employees. Musk asked employees to “go all out” to keep the company out of the red. The stock closed at a fresh record high.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| LULU | LULULEMON ATHLETICA INC. | 320.66 | +1.14 | +0.36% |
| TSLA | TESLA INC. | 345.16 | +12.27 | +3.69% |
On the earnings front, both Conagra Brands and Micron Technology beat on sales and profit and issued forecasts that topped expectations.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| CAG | CONAGRA BRANDS INC. | 27.55 | +0.10 | +0.36% |
| MU | MICRON TECHNOLOGY INC. | 97.95 | -0.25 | -0.25% |
West Texas Intermediate crude oil fell 77 cents to $38.93 a barrel while gold registered its best one quarter percentage gain since 2016 settling at $1,793 an ounce.
U.S. Treasurys were little changed, with the yield on the 10-year note holding at 0.653 percent.
In Europe, Germany’s DAX advanced 0.64 percent, while France’s CAC 40 and Britain’s FTSE dropped 0.9 percent and 0.19 percent, respectively.
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Asian markets were higher across the board, with Japan’s Nikkei climbing 1.33 percent, China’s Shanghai Composite gaining 0.78 percent and Hong Kong’s Hang Seng rallying 0.52 percent.