Stocks rallied Tuesday following sharp losses the day before, revealing a bit of optimism in the market and despite renewed fears over the ongoing COVID-19 health crisis.
The Dow Jones Industrial Average was recently up 550.91 points, or 1.6%, to 34,504.19 in mid-morning trading. The Nasdaq added about 151 points to 14,426.17. Among stocks in the retail sector, shares in Capri Holdings were rising 4.6% to $48.77, Skechers shares increased 3.7% to $47.77, and Nordstrom was up 3.5% to $32.69.
Positive corporate earnings overall are adding a sense of optimism to the market as companies are trending toward beating their earnings estimates, in part due to easier comparisons with 2020. According to Fact Set data from July 16, in the second quarter the “blended” earnings growth rate for the S&P 500 was 69.3%, which would be “the highest year-over-year earnings growth rate reported by the index since Q4 2009.” (Blended refers to “actual results for companies that have reported and estimated results for companies that have yet to report,” FactSet said.)
On Monday, stocks fell sharply amid growing coronavirus fears over the highly contagious Delta variant, rising case counts in certain areas of the country, and concerns about infections among vaccinated people.
The Dow lost 725 points, or 2.1%, to close at 33,962.04 on Monday; the index was still up about 27% year over year, though. The Nasdaq on Monday lost 152.26 points to 14,274.98.
Concerns about the spread of the COVID-19 virus took center stage on Monday. Two Nike footwear suppliers in Vietnam had stopped manufacturing late last week, and the southern region of Vietnam went on a two-week lockdown starting at midnight on Sunday given a record coronavirus case count in the country.
In the U.S., the county of Los Angeles in California re-imposed its indoor mask mandate effective Sunday, regardless of vaccination status. Officials said the mandate will remain in effect until there is an improvement in COVID-19 community transmission.
“Los Angeles County sees more than a seven-times increase in new cases since the June 15 reopening,” the county said in a recent statement, adding that from June 27 to July 3, the Delta variant made up 71% of all virus sequences collected that week.
Meanwhile, in New York City, some local public health officials have reportedly urged the city to reinstate its indoor mask mandate for all citizens; however, Mayor Bill de Blasio has so far rejected that plan, instead stating his intention to “double down” on vaccinations.
The Centers for Disease Control reported Monday that there were 182,079 COVID-19 cases nationwide and 1,530 deaths in the last seven days.