Friday, July 10, 2020

Another Problem for Airlines


By Alex Eule |  Wednesday, July 8
Flying Blind. A day after the U.S. saw 60,000 new Covid-19 cases -- the highest daily number yet -- stocks rose across the board, with tech once again leading the way. The Nasdaq Composite was up 1.4% to another record close. The gain saved the Nasdaq from consecutive days of declines, something that hasn't happened since mid May. 
The Dow Jones Industrial Average rose 177 points, or 0.7%, while the S&P 500 finished the day up 0.8%. 
The market continues to overlook seemingly distressing news, not just from the virus itself. United Airlines warned employees today that it might have to furlough nearly half of its U.S. workforce later this year given Covid-related disruptions. United stock still finished the day essentially flat, while the NYSE Arca Airline Index actually rose 0.5%. Daren Fonda has more on the United news on Barrons.com. Daren separately notes that new interstate travel rules and quarantines could soon put a damper on the rebound the airline industry has only just begun to see. 
One silver lining for the airlines could be flights to Orlando. Disney World is sticking to its planned reopening this weekend. Shares of Walt Disney were up 2.7% today, the stock's best day since June 3. 
The market's continued tolerance for risk showed up in Kohl's stock, which will need continued economic improvement to do well. Shares of the retailer soared 9%, making it the best performer in the S&P 500. Shares got a boost from Bank of America Merrill Lynch, which upgraded the stock to Buy. The company has “already shown superior reopening trends versus peers," the firm's analysts wrote. Teresa Rivas has more here
While stocks are surging generally, investors are still hedging their bets. Gold, a traditional safe haven, finished the day up 0.6%, to $1,815 an ounce. That's the precious metal's highest settlement since September 2011. 

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