By Yasin Ebrahim
Investing.com – Wall Street held onto the bulk of gains on Tuesday, as investors seemingly upped bets on large-cap tech stocks that are well equipped to benefit from an eventual economic restart, even as the first wave of quarterly earnings indicated there is plenty of coronavirus-led uncertainty ahead.
The Dow jumped 2.05%, or 480 points, theS&P 500 gained 2.54% and the Nasdaq Composite added 3.48%.
The recent wave of optimism on the economy reopening sooner rather than later appears to have drummed up investor appetite for technology stocks that had led the previous bull market rally, with FAANG names, in particular, up sharply.
Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX) and Google parent Alphabet (NASDAQ:GOOGL) rallied more than 4%, with investors appearing to favor companies with strong liquidity at a time when the current pandemic has many firms scrambling to save cash.
"A weak balance sheet means going out of business," Hussein Kanji, a partner at venture capital firm Hoxton Ventures told The Telegraph in March. "The FAANG companies are all huge cash producers."
Consumer discretionaries also contributed to the wave of green across Wall Street, led by Tesla.
Tesla (NASDAQ:TSLA) surged 12% after Credit Suisse (SIX:CSGN) upgraded its rating on the stock to outperform from neutral and hiked its price target on the stock to $580 from $415.
Financials, however, lagged the broader market rally, as quarterly results from banking stocks flagged further economic pain ahead.
JPMorgan Chase (NYSE:JPM) and Wells Fargo NYSE:WFC) reported a widely-expected slump in in first-quarter profits as they put aside billions dollars for potential flurry of loan defaults from customers. Johnson & Johnson (NYSE:JNJ), meanwhile, surged 4.6% after reported a jump in profit, led by increased demand for over-the-counter medicine.
Earnings aside, investor optimism on an economic restart sooner rather later has also supported sentiment, with governors across New York, New Jersey, Connecticut, Massachusetts, Pennsylvania, Delaware and Rhode Island expressing a willingness to work together on reopening plans.