The S&P/ASX 200 Index (ASX: XJO) is looking past a disappointing night of trade on Wall Street and is rebounding on Tuesday. The benchmark index is up 1.2% to 5,062.6 points at the time of writing.
What happened on Wall Street?
U.S. equities came under pressure on Wall Street after the decision by the U.S. Federal Reserve to cut interest rates down to zero and launch US$700 million of quantitative easing spooked the market.
The Dow Jones index had its worst day since 1987 and fell almost 3,000 points or 12.9% to 20,188.52 points. Things were equally bad for the S&P 500 index which fell 12% and the Nasdaq index which fell 12.3%.
However, news that U.S. futures are pointing higher appears to have given investor sentiment a boost in Australia.
How are the banks faring?
The big four banks have rebounded on Tuesday and are helping drive the S&P/ASX 200 Index higher.
In early trade the Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is up 1.2%, the National Australia Bank Ltd (ASX: NAB) share price is up 0.8%, and the Westpac Banking Corp (ASX: WBC) share price is 1.2% higher.
The best performer in the group is the Commonwealth Bank of Australia (ASX: CBA) share price with a 2.3% gain. This is despite Australia’s largest bank being hit with civil proceedings by ASIC in the Federal Court yesterday afternoon. This is in relation to two matters referred to ASIC for investigation by the Royal Commission.
Beverage giant Coca-Cola Amatil Ltd (ASX: CCL) and aged care provider Estia Health Ltd (ASX: EHE) have withdrawn their guidance due to the uncertainty caused by the coronavirus outbreak. Despite this news, their shares are pushing higher in early trade.
Getting back to Cochlear. The hearing solutions company was dealt another blow today when it revealed that it has lost an appeal in the United States Court of Appeals to overturn the award of US$268 million in patent infringement damages to the Alfred E. Mann Foundation for Scientific Research and Advanced Bionics.
But once again, improving investor sentiment means that not even this news could drag its shares lower. The Cochlear share price is up 0.5% in early trade.
And finally, the Qantas Airways Limited (ASX: QAN) share price is up 2.5% this morning after revealing further cuts to its capacity in response to the coronavirus outbreak. The airline operator will cut its international capacity by upwards of 90%.
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James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. The Motley Fool Australia owns shares of National Australia Bank Limited. The Motley Fool Australia has recommended Cochlear Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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