By Geoffrey Smith
Investing.com — U.S. stock markets bounced back from Tuesday’s losses to open higher on Wednesday, as White House economic advisor Larry Kudlow repeated that the economy will not be shut down again to throttle the recent surge in coronavirus cases.
Kudlow also told CNBC that “Every piece of data shows a V-shaped recovery” in the economy, contradicting Atlanta Fed President Raphael Bostic, who had warned in more than one appearance earlier in the week that the recovery was in danger of stalling due to the surge in infections.
Kudlow’s commentary on the state of the virus hasn’t been foolproof – he famously said that the U.S. had contained it “pretty close to airtight” back in March – but his comments were partially vindicated by another 2.2% weekly rise in mortgage applications, further fleshing out the picture of relative health from the housing market.
By 9:45 AM ET (1345 GMT), the Dow Jones Industrial Average was up 123 points, or 0.5%, at 26,014 points. The S&P 500 was up 0.7% and the Nasdaq Composite was up 0.9%. All three indices had registered heavy losses on Tuesday, snapping a five-day winning streak.
Among individual stocks, insurance group Allstate’s (NYSE:ALL) stock fell 2.6% to a new three-month low after it agreed to pay $4 billion in cash for smaller rival National General (NASDAQ:NGHC), a premium of over 60% to Tuesday’s closing price that made National General stock the biggest gainer in early trading.
AMC Entertainment (NYSE:AMC) also rose 4.3% after The Wall Street Journal reported that it is in talks with creditors to avoid having to seek chapter 11 bankruptcy protection. The movie theater operator’s performance was kept in check by the WSJ’s observation that the debt restructuring being proposed by its biggest creditor is opposed by a group of other bondholders.
At the other end of the spectrum, Levi Strauss (NYSE:LEVI) stock fell 7.3% after it reported that sales fell 62% in the three months through June, forcing it to cut some 15% of staff.
Alternative energy vehicle stocks were again in the spotlight, with hydrogen-powered truck venture Nikola (NASDAQ:NKLA) stock rising 24% and Chinese battery-powered car maker Nio (NYSE:NIO) rising another 14%. to an all-time high after its better-than-expected sales figures for the second quarter.
Elsewhere, Newmont Goldcorp (NYSE:NEM) stock rose 1.9% to its highest in seven weeks as the spot price of gold rose above $1,800 for the first time since 2001. By 10:15 AM ET (1415 GMT), gold was up 1.0% at $1,813.41 a troy ounce.
Stocks – Wall Street Opens Higher as Kudlow Rules out Fresh Closures; Dow up 125
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