Stock gains ebb as investors clobber tech stocks ahead of earnings

US stocks made a wobbly climb Tuesday as Wall Street weighed how the global economy will look once it emerges from its coronavirus-induced coma.

The Dow Jones industrial average gave up an early 1.5 percent jump to trade up 115.80 points, or 0.4 percent, at 24,249.58 as of 2:13 p.m. That put the blue-chip index on pace for its fifth straight day of gains after it turned red earlier in the day.

The S&P 500 was recently up 0.3 percent after climbing 1.4 percent and then slipping as much as 0.5 percent. The tech-heavy Nasdaq also posted an early 1.1 percent jump but tumbled as much as 1.2 percent by midday.

Analysts noted that tech stocks that have largely weathered the pandemic suffered Tuesday while some companies hit hard by the market’s brutal downturn last month got a boost.

Shares in tech giants Alphabet and Amazon dipped as much as 2.6 and 2.9 percent, respectively, ahead of their quarterly earnings reports this week. But movie theater chain AMC saw its stock price jump as much as 25 percent to $4.20 while cruise operator Carnival shot up 11.6 percent to a high of $14.49.

The volatile movements suggested investors were shuffling their portfolios as some US states and European countries moved to restart their economies following lockdowns meant to curb the coronavirus, according to experts. Optimism about a gradual reopening lifted stocks Monday.

“You’re just getting some healthy backing and filling as people kind of digest what the reopening of the economy is going to look like,” said Eric Marshall, director of research at Hodges Capital Management. “Clearly the reality is it’s not gonna go back to the status quo that we were at here a few months ago right away.”

Investors are starting to reassess where the best opportunities lie now that companies that took a beating from the crisis have avoided bankruptcy, according to Lamar Villere, portfolio manager of the Villere Balanced Fund.

“Maybe some of the things that we left for dead aren’t gonna die, but companies that we thought were doing just fine … maybe have some risk to them as the economy starts to slow down,” Villere said.

Tuesday also saw continued pressure on oil prices amid concerns about storage facilities filling up. West Texas Intermediate crude oil futures fell as low as $10.07 a barrel Tuesday morning before recovering to $12.39 as of 2:11 p.m.

Wall Street also has to digest a slew of corporate earnings reports this week from major companies such as BP, PepsiCo and Facebook. But investors are likely more focused on the improving health data and the potential for more stimulus measures to backstop the economy during the virus crisis, according to David Bahnsen, chief investment officer of The Bahnsen Group.

“Earnings season does not matter, other than to the extent companies can provide dividend reaffirmation, or provide some macro color,” Bahnsen said. “No surprises can come from current events creating negative impact — it is totally baked in.”

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