The Dow is now up nearly 600 points as stocks snap back from Monday’s decline

Major averages rebounded Tuesday as investors stepped in to buy the dip from the Dow Jones Industrial Average’s worst day in eight months. The comeback rally gained steam steadily through the session as a bounce in Treasury yields soothed some concerns that a Covid resurgence would slow down the economic recovery. As the 10-year yield bounced back above 1.20%, the run in stocks increased.

At last count, the Dow Jones Industrial Average was up 585 points, or 1.7%, following its 725 point-decline Monday. It was the biggest jump for the Dow in more than a month. The S&P 500 and the Nasdaq Composite added 1.5%. The small-cap benchmark Russell 2000 index jumped 2.7%.

Many of the stocks that were hit the hardest on Monday, on concerns about Covid-19′s delta variant, bounced Tuesday. American Airlines and Delta Air Lines added 5% and 4%, respectively. Royal Caribbean gained 5%, after falling 4% on Monday. Bank shares are bouncing too as investors continue to monitor bond yields under pressure. JPMorgan and Bank of America are up more than 2%. Zions Bancorp jumped 6% and Regions Financial rose 4%.

Traders continue to eye the 10-year Treasury yield, which appeared to be driving the action in the equity markets. It fell to a 5-month low on Monday, heightening concerns about the slowing global economy and helped push equities lower, and briefly sank as low 1.128% early Tuesday before rebounding. It was above 1.78% in March, and its fall amid the recovering economy has mystified and worried investors.

The Dow is now up nearly 600 points as stocks snap back from Monday’s decline, CNBC, Jul 21