US Stocks Recoup Monday Losses, Dow Gains Over 280 Points
22 Jul 2021 · 3rd Party Analysis
- Stock indexes press ahead in a broad rally as investors pile onto companies across sectors
- Futures remain elevated, suggesting the upside swing will continue on Thursday
Stocks on Wall Street rose Wednesday, building on their Tuesday rally to recover from the weak start of trading this week. Investors were once again confident to shift gears into pursuits of higher returns as stocks across the board were lifted on renewed beliefs the economic expansion is bound to continue.
The Dow Jones Industrial Average added 286.01 points, or 0.83%, to finish the session at 34,798.00. Extending the gains into a second day, the blue-chip stock benchmark was able to recoup the hefty loss of 725 points on Monday. The S&P500 also unwound Monday’s steep decline as it rallied 35.63 points or 0.82%, to end the day at 4,358.69. The broad-based index had its biggest one-day gain since March and now hovers about half a percent from its record high.
The Nasdaq Composite built on its Tuesday momentum and logged 133.08 points, or 0.92%, to close at 14,631.95. The tech-heavy index erased all Monday losses a day later.
Market participants enjoyed another strong day of gains during the second week of the earnings season. Second-quarter financial results helped buoy the mood and concerns over the Delta variant, responsible for Monday’s sell-off, were largely lifted from the market.
The sharp recovery that took just two days to recoup nearly a 3% decline, according to analysts, highlighted the jittery moods of traders and investors who lurch from extreme fear to elevated optimism. Over the past several months, shares have been anything but stable as investors try to price in surging inflation figures, Fed guidance, uneven reopening threatened by rising Delta virus cases, and people’s reluctance to get vaccinated.
Coca-Cola Reveals Positive Forecast
Despite the inherent risks hidden in the lofty valuations of stocks floating near records, investors on Thursday are betting the upside swing will continue. Futures contracts tied to the major equity gauges indicate a continuation of the run toward higher grounds. Nasdaq futures are higher by about 0.20%, while Dow futures and S&P500 futures are in the green by roughly 0.10% each.
In corporate news, Coca-Cola delivered an upbeat forecast for its future growth. The beverage company revised its organic revenue growth for the year from 8% to between 12% and 14%. “While we over-delivered relative to our expectations in the first half and have raised guidance for 2021, we are biased towards a growth mentality and will invest behind this momentum going into the rest of the year,” Coca-Cola CEO Jack Quincey said.
In Europe, shares advanced for a second consecutive day following the sharp sell-off on Monday. All major European bourses finished trading in positive territory. The region-wide Stoxx 600 Europe added a solid 1.65%-gain to its valuation and now sits about 1.5% from its record high earlier in the month.
Today, the European Central Bank is set to meet in Frankfurt for its monetary policy meeting. The focus will be on introducing the first guidance change in over 20 years. Earlier in the month, ECB President Christine Lagarde informed the central bank has decided to raise its inflation target from “below, but close
to 2% target” to a “symmetrical” 2% inflation. The move will allow policymakers to tolerate price deviations above and below the target.
Over to cryptocurrencies, Tesla CEO Elon Musk, Twitter CEO Jack Dorsey, and ARK CEO and CIO Cathie Wood appeared together in an online discussion aimed to highlight Bitcoin’s functions and characteristics. While all praised the benefits of welcoming Bitcoin into mainstream finance, the price of the leading digital token fell during the event. Still, before the online conference, bitcoin advanced and managed to close the session at $31,800, higher by nearly 8% on the day.