Major banks kicked off earnings season Tuesday morning, and markets opened lower as stocks continue to take a hit on concerns about a record number of new coronavirus cases in the United States.
The Dow Jones Industrial Average was down 0.2%, nearly 100 points, at Tuesday’s open, while the S&P 500 fell 0.4% and the tech-heavy Nasdaq Composite lost 0.5%.
Shares of JPMorgan jumped more than 1% after the bank reported better-than-expected second quarter earnings, boosted by a 79% surge in trading revenue.
Shares of Wells Fargo, on the other hand, dropped more than 6% after the bank reported a $2.4 billion loss—its first quarterly loss since the 2008 financial crisis—and slashed its dividend to 10 cents per share.
Tech stocks, which boosted the market higher for much of last week, declined again on Tuesday: Facebook, Amazon, Netflix, Microsoft and Google-parent Alphabet all saw their shares move lower.
The stock market continues to largely hold steady despite a backdrop of surging coronavirus infections across the country: The U.S. reported record numbers of daily new cases last week, with many states now rolling back reopening plans.
California is ordering some indoor businesses like restaurants and bars to re-close statewide as new cases continue to spike, while Florida on Sunday saw a massive 15,000 new cases, the highest single day total for any state so far.
“Given the nonstop rally of late in the Nasdaq and earnings season on the horizon,” the latest reversal in stocks “should at least serve as a reality check that the market isn’t a one-way street,” Bespoke Investment Group said in a recent note.
Corporate profits are expected to plunge 44% in the second quarter, according to Refinitiv data. That would be the worst drops since the fourth quarter of 2008, when corporate profits declined by 67%.
The S&P briefly turned positive for the year before closing lower in Monday’s volatile trading session. The Dow gave up a 500-point gain before ending the day up only 10 points. Much of the sell-off can be attributed to a rollover in big tech stocks, which had helped boost the market higher in recent weeks—with the Nasdaq hitting several record highs last week.
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