Technical and energy actions stimulate Wall St in a bear market rally

Major Wall Street indexes rose on Tuesday after investors snatched stocks of megacap companies and energy companies that were shattered last week over concerns about the global economic downturn.

All 11 major S&P sectors have made progress in the short-term recovery. The S&P 500 and Nasdaq are still in a bear market, with the benchmark down 21.6% from its record high at January. 3.

“We still look at it as a bear market rally. At the moment, this is just another one-day miracle, and investors have seen this film before, “said Ken Mahoney, CEO of Mahoney Asset Management.

Energy was the most profitable with 4.3%, after losing more than 17% last week. Apple Inc and Tesla Inc jumped 3.8% and 10.8%, respectively, strengthening the S&P 500 and the technology Nasdaq.

“So while we have this rally today, I’m looking at the volatility index, which is a little down, it’s not really buying. There is still a lot of nervousness around the markets. “

The CBOE volatility index, also known as the Wall Street Fear Indicator, fell to 29.94 points, its lowest level since June 15, but still above its long-term average of 19.6 points.

The S&P 500 during its previous session saw its biggest weekly decline since March 2020, as investors feared that global central banks’ aggressive moves to fight inflation would slow economic growth.

Markets rose in July and September amid growing doubts about whether the US Federal Reserve could create a soft landing for the economy and avoid a recession.

Goldman Sachs now expects a 30% chance that the US economy will fall into recession next year, compared to its previous forecast of 15%.

“The market may have already appreciated in a shallow recession … you had negative GDP in the first quarter, so the second quarter may be negative, in which case the recession could potentially be in the rearview mirror,” said Thomas Hayes, managing member. from Great Hill Capital in New York.

All eyes are now on Fed Chairman Jerome Powell’s testimony before the Senate Banking Committee on Wednesday for evidence of future interest rate hikes.

At 11:43 ET, the Dow Jones Industrial Average rose 550.36 points, or 1.84%, to 30,439.14, the S&P 500 rose 90.52 points, or 2.46%, to 3,765 , 36, and the Nasdaq Composite, or 30 points, rose 90.52 points, or 2.46%, to 3,765.36 points, or 30 points. %, at 11,121.81.

Kellogg Co rose 4.1% after the cereal maker said it was splitting into three separate companies with a focus on snacks.

Spirit Airlines jumped 8% as JetBlue Airways sweetened its offer to persuade the ultra-low-cost carrier to accept its offer over rivals Frontier Airlines.

Advanced emissions outperform NYSE’s 4.86 to 1 and Nasdaq’s 3.59 to 1 reductions.

The S&P index recorded a new 52-week high and 30 new lows, while the Nasdaq recorded 34 new highs and 69 new lows.

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