July 21 (UPI) — The Dow Jones Industrial Average gained 286 points on Wednesday as markets rallied for the second consecutive day.
The blue-chip index climbed 0.83%, while the S&P 500 increased 0.82% and the Nasdaq Composite closed the day up 0.92%.
Chevron stock helped lead the Dow, rising 3.41% as oil prices rebounded after falling below $70 a barrel on Monday and Boeing also turned in a strong performance gaining 2.48%.
Earnings reports continued to roll in on Wednesday as Chipotle stock gained 11.54% and Coca-Cola stock increased 1.29% after both companies reported quarterly revenue that surpassed pre-pandemic levels.
On the contrary, Netflix stock dipped 3.28% after reporting it expects 3.5 million net subscribers in the third quarter, nearly 2 million below what analysts estimated.
“If the theme from earnings season continues to be an upbeat outlook for the economy and strong consumer that is handling the current price increases, treasuries could plunge even further, and the 10-year yield could be back above 1.4% by the time earnings season wraps,” Onada senior market analyst Edward Moya said, according to Investor’s Business Daily. “The reflation trade is back and this time it might stick around.”
The 10-year treasury yield rose 8 basis points to 1.293% on Wednesday after falling to a 5-month low on Monday but bonds remained down from 1.7% earlier this year.
“The Catalyst for why investors have become comfortable with risk assets over the past two days is admittedly elusive,” Goldman Sachs’ Chris Hussey told CNBC Wednesday. “Perhaps investors have just come to embrace the notion that the reaction function to a new wave of the virus is unlikely to be the same as the reaction function employed in the spring of 2020.
