US Stocks End Up On Hopes For More Federal Stimulus

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 jumped 2.1 percent to 26,642.

The S&P 500 gained 1.3 percent to 3,197, while the Nasdaq advanced 0.9 percent to 10,488.

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 percent, and industrial giant Caterpillar, which rose 4.9 percent.

The banks themselves had a mixed session on Wall Street, with JPMorgan adding 0.6 percent after reporting better-than-expected profits.

But Citigroup, which also topped expectations, fell 4.0 percent, while Wells Fargo shed 4.6 percent after reporting a US$2.4 billion loss.

Delta Air Lines dropped 2.6 percent as it reported a second-quarter loss of US$5.7 billion due to the steep downturn in travel caused by the coronavirus. (AFP)