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(Photo: Reuters)
(Photo: Reuters)

US stocks rise as traders see hopeful signs in fighting coronavirus

  • Major banks kicked off earnings season in the wake of economic hit from coronavirus shutdowns
  • Technology stocks powered much of the broad rally

Stocks moved broadly higher on Wall Street Tuesday as the White House and a number of state governors weigh how to gradually reopen the economy following some signs that the coronavirus pandemic may be leveling off in some of the hardest-hit areas.

Traders also had their eye on Johnson & Johnson, JPMorgan Chase and other big companies issuing their earnings reports for the first three months of the year, giving investors an early peek into how the outbreak is affecting their business.

The S&P 500 was up 2.8% as of 10:24 a.m. Eastern time, recovering all of its losses from a day earlier. The benchmark index surged 12% last week, though it remains about 18% below its all-time high set in February.

Technology stocks powered much of the broad rally in the early going Tuesday. That helped drive the Dow Jones Industrial Average 608 points higher, or 2.6%, to 24,005. The Nasdaq rose about 3.4%.

European markets were mostly higher after reopening following a holiday. Asian markets ended mostly higher.

Bond prices rose. The yield on the 10-year Treasury fell to 0.74% from 0.75% late Monday.

Johnson & Johnson rose after beating earnings estimates, even thought the health care giant also had to slash its outlook. JPMorgan Chase rose after setting aside billions of dollars to cover potential losses.

Analysts predict that earnings for all the companies in the S&P 500 will be down 9% in the first quarter from a year earlier, according to FactSet. That would be the biggest annual decline in earnings for the index since the third quarter of 2009 when earnings slumped nearly 16%.

Other major companies that will report earnings this week include Wells Fargo, Bank of America, UnitedHealth Group, and Rite Aid.

Wall Street is mostly focused on what companies have to say about their prospects for earnings the rest of the year, though many have ceased giving earnings estimates due to uncertainty over the full economic fallout caused by the social distancing and stay-at-home mandates that have all but ground the economy to a halt.

Cautious optimism that the outbreak in the U.S. has begun to plateau in some of the worst-hit areas and another big infusion of economic support by the Federal Reserve helped spur a big rally for the market last week.

The closure of businesses and mandates for people to stay home to combat the coronavirus pandemic have forced record numbers of people out of work, raising the possibility that many businesses could end up bankrupt.

The International Monetary Fund said Tuesday that the world economy will suffer its worst year since the Great Depression.

There are more than 1.92 million confirmed coronavirus cases worldwide, led by the United States with more than 582,000, according to a tally by Johns Hopkins University.

Still, positive signs in New York and other areas that have seen a big share of COVID-19 cases are fueling a debate in Washington and among state governors about when and how to reopen the economy after weeks of tough social distancing guidelines aimed at fighting the outbreak.

Anxious to put the crisis behind him, President Donald Trump has been discussing with senior aides how to roll back federal social distancing recommendations that expire at the end of the month. On Monday, Trump asserted that he he could force governors to reopen their states.

Data released Tuesday showed China’s exports fell at a slower pace in March than in the previous two months. Forecasters warned of harder times ahead as the coronavirus pandemic depresses global demand and disrupts production, supply chains and finance.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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