Tuesday's Stock Market Close: US Equities Climb On Hopes Coronavirus May Have Peaked In US

U.S. stocks jumped on Tuesday on some optimistic signs that the coronavirus crisis has stabilized in the U.S., as first quarter earnings season got underway.

The Dow Jones Industrial Average gained 558.99 points to 23,949.76, while the S&P 500 rose 84.43 points to 2,846.06 and the Nasdaq Composite Index advanced 323.32 points to 8,515.74.

Volume on the New York Stock Exchange totaled 4.74 billion shares with 2,243 issues advancing, 21 setting new highs, and 747 declining, with six setting new lows.

Active movers were led by General Electric (GE), Advanced Micro Devices Inc. (AMD) and Bank of America Corp. (BAC).

U.S. President Donald Trump said on Monday that new coronavirus infections have stabilized, providing “clear evidence” that mitigation efforts have been successful.

Andrew Cuomo, the governor of New York, the epicenter of the pandemic in the U.S. said “the worst is over ... if we continue to be smart going forward.”

More than 1.9 million cases of COVID-19 have been confirmed around the world, with almost one-third of them in the U.S.

“Financial markets have started to take a more positive view of the outlook,” said Jan Hatzius, chief economist at Goldman Sachs. “The initial improvement was mostly policy-driven, but the greater optimism of the past week seems to be at least partly related to the virus itself. To be clear, the health situation remains very bad in absolute terms, especially in the U.S. which is now ahead of Italy and Spain in terms of coronavirus-related fatalities (though still much lower on a per-capita basis). However, the number of new active cases looks to be peaking globally.”

“When you look at the facts, I think there’s reason to be more hopeful than we have been,” said CNBC’s Jim Cramer. “The worst case scenario’s been taken off the table, and if Apple and Google can do contact tracing that we all embrace ... while we continue to roll out more testing, the economy could reopen a lot sooner than we thought even, say, three weeks ago.”

“The Fed has really pulled out all stops in terms of keeping markets liquid and fluid,” said Gibson Smith, founder of Smith Capital. “My expectation is over the next three to six months, assuming we get the virus contained ... we’ll look back on this period of time and realize it was it was just a moment in time with a lot of volatility and we probably have better times in front of us than worse times.”

On the earnings front, Johnson & Jonson (JNJ) reported better-than-expected earnings, raised dividends, but cut its forecast. Shares jumped 4.48%.

Wells Fargo (WFC) was first quarter net income plunge by 89%. Shares fell 4.04%.

JPMorgan Chase (JPM) reported a decline in first quarter profits, but delivered record markets revenue. Shares dropped 2.74%.

Analysts expect S&P 500 earnings growth to fall by 10.2% in the first quarter year-over-year.

“Even the lowered forecast may prove optimistic given some analysts have not adjusted numbers since mid-March in response to the lockdowns in many major cities throughout the country,” said Jeff Buchbinder, equity strategist for LPL Financial.

Overnight in Asia, markets were higher. China’s Shanghai Composite rose 1.59%, Hong Kong’s Hang Seng gained 0.56% and Japan’s Nikkei-225 jumped 3.13%.

In Europe markets closed mixed, as Britain’s FTSE-100 slipped 0.88%, France’s CAC-40 rose 0.38% and Germany’s DAX gained 1.25%.

Crude oil futures plunged 8.03% at $20.61 per barrel, Brent crude gained 1.39% at $30. Gold futures dropped 6.1%.

The euro gained 0.68% at $1.0984 while the pound sterling gained 0.98% at $1.2628.

The yield on the 10-year Treasury edged up 0.4% to 0.752% while yield on the 30-year Treasury rose 1.51% to 1.412%.