Wall Street romps back after sharp Monday drop

VIDEO: REUTERS

NEW YORK (AFP) - Wall Street closed higher on Tuesday (July 20), regaining ground lost the day before when fears about inflation and the Delta variant of Covid-19 dragged the market to the worst session of the year.

Worries about a rocky recovery for the US economy were behind Monday's rout, but there was little sign of that sentiment in Tuesday's broadly positive trading.

The benchmark Dow Jones Industrial Average closed 1.6 per cent higher at 34,511.99.

The tech-rich Nasdaq Composite Index also gained 1.6 per cent to finish at 14,498.87, while the broad-based S&P 500 climbed 1.5 per cent to hit 4,323.06.

Peter Boockvar, chief investment officer of Bleakley Advisory Group, said with the latest coronavirus variant continuing to spread and inflation remaining a concern, it was unclear what caused stocks to recover, other than investors moving to acquire shares at lower prices.

"I can't explain why we're freaked out about Delta one day and don't care the next," he said.

Gains among equities were widespread, with companies in the travel industry that would benefit from a return to normalcy performing well.

Delta Air Lines gained 5.5 per cent, American Airlines 8.4 per cent and United Airlines 6.6 per cent prior to reporting another quarterly loss but predicting profits returning in the second half of the year.

IBM finished 1.5 per cent higher after reporting higher revenues for the second quarter in a row in results that topped analyst expectations.

Among other tech firms, Apple gained 2.6 per cent, and Microsoft rose 0.8 per cent.

Banks gained as bond yields rose slightly, with Bank of America closing 2.1 per cent higher, Citigroup rising 1.9 per cent and Wells Fargo finishing with a 4.2 per cent increase.