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US: Stocks end up on hopes for more federal stimulus, Dow +2.1%
[NEW YORK] Wall Street stocks were back in rally mode on Tuesday, shrugging off mixed results from large banks and gaining ground on hopes for more stimulus spending from Washington.
The Dow Jones Industrial Average jumped 2.1 per cent to 26,642.59.
The broad-based S&P 500 gained 1.3 per cent to 3,197.52, while the tech-rich Nasdaq Composite Index advanced 0.9 per cent to 10,488.58.
The gains came as media reports said leading Republicans in the White House and on Capitol Hill were revising their stance on stimulus measures, including their prior opposition to extending supplemental unemployment benefits.
"The promise of fiscal stimulus is boosting peoples' economic expectations," said Chris Low, chief economist at FHN Financial.
Banking giants JPMorgan Chase, Citigroup and Wells Fargo together reported some US$28 billion in credit costs for current and future bad loans due to the hit from Covid-19 closures.
That came as coronavirus cases remained on a sharp upswing in much of the United States, crimping hopes for a speedy economic bounceback.
Tuesday's gains were led by growth-linked equities, such as oil companies including Exxon Mobil, which gained 3.3 per cent, and industrial giant Caterpillar, which rose 4.9 per cent.
The banks themselves had a mixed session on Wall Street, with JPMorgan adding 0.6 per cent after reporting better-than-expected profits.
But Citigroup, which also topped expectations, fell 4.0 per cent, while Wells Fargo shed 4.6 per cent after reporting a US$2.4 billion loss.
Delta Air Lines dropped 2.6 per cent as it reported a second-quarter loss of US$5.7 billion due to the steep downturn in travel caused by the coronavirus.