After a strong sell-off on Monday, the Dow Jones Industrial Average rose for the second day in a row, also S&P 500 and the Nasdaq index both rose. The positive sentiment was bolstered by better-than-expected earnings announcements from Dow members Coca-Cola and Johnson & Johnson. Bitcoin gained momentum to push past $32,000.
Early this week, a return of Covid-19 cases in many heavily vaccinated countries resulted in significant stock market losses. However, a rally on Tuesday and Wednesday has recouped most of those losses so far.
The 10-year U.S. Treasury bond yield, which has remained a key indicator of the economy’s progress, fell to 1.13% early Tuesday. However, the yield rose to 1.28% on Wednesday as money continued to move from bonds to stocks. On Monday, the yield fell to a fresh 5-month low before recovering on Tuesday. The rate cut alarmed stock investors by implying a possible economic slowdown due to the spread of Covid variants or a possible Federal Reserve blunder.
After a brief sell-off on Wednesday, bitcoin and other cryptocurrencies recovered, with the world’s most valuable digital asset soaring back above $30,000. The drop followed news that the New Jersey attorney general had sent crypto lending business BlockFi a cease-and-desist letter, ordering it to stop selling interest-bearing accounts.
The rationale for Wednesday’s increase was not immediately evident. Cryptocurrencies are prone to wild price movements. Tesla CEO Elon Musk, on the other hand, has stated that the company will most certainly resume accepting Bitcoin for vehicle purchases. This could bolster the positive sentiment in the market. At the time of writing this article Bitcoin price stood at $32,155.34 up 5.69% for the day.
Quick market analysis
The Nasdaq ended the day with a 0.92%. while the S&P 500 index increased by 0.82%. The Dow Jones Industrial Average increased by 0.83%. In comparison to Tuesday’s close, trading volume on the NYSE and Nasdaq was lower.
Stocks outperformed the Dow Jones on Wednesday, with Chevron (CVX) leading the way with a 3.41%. The stock, like the rest of the energy sector, is recovering from the recent slump that occurred weeks ago and the drop in oil prices on Monday. Boeing (BA) and Goldman Sachs (GS) both recorded gains of 2.48% and 2.40%, respectively, in trading yesterday.
Verizon (VZ), one of the Dow Jones firms that posted profits early Wednesday, rose substantially when the company topped expectations.
Coca-Cola, a Dow component, boosted market confidence early after reporting quarterly sales that exceeded pre-pandemic 2019 levels, upping its full-year outlook. Coca Cola’s stock increased by 1.29%.
Johnson & Johnson’s stock was practically flat with gains of 0.62% even after the drugmaker posted better-than-expected second-quarter earnings and revenue that upped its 2021 projection.