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A tourist poses for a photo in Hollywood, California on Jul. 19, 2021, the second day of the return of the indoor mask mandate in Los Angeles County due to a spike in coronavirus cases. AFP via Getty Images

U.S. stocks were higher on Wednesday, with bond yields rising as a bounceback from an early-week slump continued. Earnings and rising coronavirus cases around the world remained in focus for investors.

By midmorning, the Dow Jones Industrial Average was up 258 points, or 0.8%, while the S&P 500 was 0.6% higher and the Nasdaq Composite was up 0.4%. That is following a 550-point, or 1.6%, rally in the Dow on Wednesday, a 1.5% gain for the S&P 500 and 1.6% gain for the Nasdaq. Those gains followed sharp losses on Monday amid investor concerns over the potential damage from a fresh wave of coronavirus cases, which have largely been hitting the unvaccinated.

In a continuation of Tuesday’s trading action, economically-sensitive stocks were performing the best. Banks, for example, were rising significantly, with the  SPDR S&P Bank exchange-traded fund (KBE) up 2.4%. 

Consistent with the stock market’s behavior Wednesday, the 10-year Treasury yield rose to 1.27% from 1.21%. The yield usually rises and falls with expectations for inflation and economic demand. 

Driving the confidence: fears that the Covid-19 Delta variant—which shook markets Monday—are fading. That means investors can have more confidence in the continued economic recovery. “Companies like Chipotle and United Airlines said the increase in COVID cases was not hurting business, which helped reassure markets that the Delta variant isn’t changing consumer’s behavior,” writes Tom Essaye, founder of Sevens Report Research. 

A study released on Tuesday indicated Johnson & Johnson ‘s one-shot Covid-19 vaccine may be much less effective against the highly contagious Delta variant. The study, which examined blood samples in a lab setting, hasn’t been peer-reviewed. A J&J spokesperson told the New York Times that data from the latest study “do not speak to the full nature of immune protection.”

Johnson & Johnson (ticker: JNJ) shares were flat after the company reported a profit of $2.48 a share, beating estimates of $2.27, on sales of $23.31 billion, above expectations for $22.21 billion. 

Coca-Cola  (KO) stock gained 2.1% after reporting a profit of 68 cents a share, beating estimates of 56 cents a share, on sales of $10.1 billion, above expectations for $9.3 billion. 

Shares of Netflix (NFLX) slipped 3.3% after the streaming service reported lighter-than-expected guidance for subscriber growth with its results late Tuesday. It also confirmed recent reports that it is looking into expanding into streaming videogames.

Stock in Chipotle Mexican Grill (CMG) jumped 9% following the burrito chain’s upbeat fiscal second-quarter report late Tuesday. The company’s chief financial officer also said he was optimistic about more postpandemic growth ahead.

United Airlines (UAL) stock gained 4.2% after reporting a loss of $3.91 a share, in line with estimates, on sales of $5.47 billion, above expectations for $5.37 billion. 

The Nikkei 225 index rose after Japanese data showed a bigger-than-expected jump in June exports, beating forecasts. China’s CSI 300 index rose, but the Hang Seng dropped. Singapore announced it would return to a partial lockdown for a month, while Australia’s two biggest states reported rising Covid-19 cases despite lockdowns. Australian stocks rose after data showed rising retail sales. European stocks climbed as several heavily weighted companies reported results.

In Europe, shares of SAP fell, after the German software maker reported lower operating profit and revenue in the second quarter. That is as SAP lifted its targets for the year, citing expectations for higher cloud revenue growth.

Stock in ASML Holding climbed, after the Dutch semiconductor equipment maker reported higher second-quarter net profit rose and lifted full-year revenue growth guidance. It also launched a share-buyback program of up to €9 billion ($10.6 billion) until the end of 2023.

Halliburton  (HAL) stock gained 5.2% after getting upgraded to Buy from Neutral at Goldman Sachs.  

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com