July 7, 2022

US stocks end volatile session with gains

US stocks end volatile session with gains

US stocks tumbled higher on Monday as government bond yields fell and investors seized the opportunity to snap up battered technology and other growth stocks.

The S&P 500 rose 24.34 points, or 0.6%, to 4,296.12 after falling about 1.7% earlier in the session. The Dow Jones Industrial Average advanced 238.06 points, or 0.7%, to 3,049.46 points.

The Nasdaq Technology Weight Composite Index rose 165.56 points, or 1.3%, to 13,004.85.

Twitter

Involved rose 5.7% After accepting the social media company

Elon Musk‘s

$44 billion acquisition deal.

All three indices opened lower after Chinese stocks suffered their worst sell-off in more than two years as Beijing stuck to its zero Covid strategy while facing rising cases in major cities. Oil prices fell, at one point below $100 a barrel, before starting to rise this afternoon.

Investors said the drop in bond yields signaled to investors that the Federal Reserve may not move to raise interest rates as aggressively as feared.

“The rates were impacting the market,” said Jack Ablin, chief investment officer at Cresset Capital. “Now what we’re seeing is a reversal of that trend.”

The yield on the benchmark 10-year Treasury fell to 2.825% on Monday from 2.905% on Friday as investors sought safer assets to hold. Yields and prices move inversely.

“I think a lot of growth stocks have been hit hard,” said Brian Price, head of investment management at Commonwealth Financial Network. “Part of what we’re seeing may be a reflection of that. Long-term interest rates have moved so far.

“The market is going down and assessing whether it should move that fast. And lower interest rates tend to help stocks grow.”

Twitter price rose $2.77 to $51.70.

Microsoft

It jumped $6.69, or 2.4%, to $280.72, while the main Google

the alphabet

He added $68.77, or 2.9%, to close at $2,461.48

Meanwhile, the S&P 500’s energy sector was the biggest loser, down 3.3%.

Schlumberger

It fell $2.96, or 7.1 percent, to $38.69.

Halliburton

It fell $2.36, or 6.3%, to $35.33.

APAAnd

Parent company Apache slipped $1.63 or 4% $39.08.

Investors are worried about that strict policies China has a place to fight Covid-19 that will further disrupt global supply chains. But investors said extended shutdowns and a slowdown in the Chinese economy could hamper global oil demand.

The Shanghai Composite and CSI 300 are down 5.1% and 4.9%, respectively. here they are Largest one-day percentage drop For both benchmarks since February 2020, in the early days of the pandemic.

The offshore yuan fell about 1% to trade at around 6.59 per dollar. This was the lowest since November 2020, according to FactSet. This pullback was built on last week’s selling which ended months of relative stability.

With Shanghai still in lockdown amid China’s largest outbreak of Covid-19, residents are turning to social media to vent about food shortages or are bargaining with neighbours. Anxiety and hunger prompt many to question Beijing’s anti-epidemic strategy. Photo: Chinatopix via AP

“The problem with inflation is that it can become embedded and we see inflation become very flat,” said Sebastian Mackay, multi-asset fund manager at Invesco. “What we’re seeing is a combination of the war in Ukraine and the shutdown in China causing supply problems.”

Restricting movement in China could also drain oil demand. Brent crude, the international oil standard, fell 4.1 percent to $102.32 a barrel. Oil prices remain near historically high levels due to concerns about turmoil in energy markets from Russia’s invasion of Ukraine.

In other corporate news, share

coca cola

It rose 69 cents, or 1.1%, to $65.94. The company said so Recorded higher sales For the last quarter with continued demand in the face of rising prices.

Advanced Micro Devices

It added $2.55, or 2.9%, to $90.69 after an analyst Raymond James raised his assessment of the chipmaker’s shares.

High inflation caused the Federal Reserve to increase efforts to combat it. Last week, Federal Reserve Chairman Jerome Powell indicated that the central bank is ready for it Tighten monetary policy more quickly It indicated that it was likely to raise interest rates by half a percentage point at its meeting in May.

Money managers are concerned that large increases in federal interest rates could slow economic growth or even push the economy into recession. Mr. Mackay said this could lead to a situation where the Fed would have to raise interest rates in the short term but cut them in the long term.

Monday ,

Cboe

The volatility index – the so-called Wall Street fear gauge, also known as VIX – approached its highest level since mid-March before easing back to 27.02.

The Dow Jones Industrial Average on Friday posted its worst one-day percentage change since October 2020.


picture:

Brendan McDermid/Reuters

Gold futures were down 2% to $1,893.20 an ounce. While gold has historically been seen as a hedge against inflation, it pays no yield, making it less attractive than government bonds at a time when interest rates are rising. The cost of buying gold, denominated in dollars, is also more expensive for foreign investors when the dollar is rising.

Offshore, the Stoxx Europe 600 Continental Index is down 1.8%. South Korea’s Kospi Index fell 1.8%, and Japan’s Nikkei 225 Index contracted 1.9%.

How do the biggest companies work?

Write to Caitlin Ostroff at [email protected] and Justin Baer at [email protected]

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