July 6, 2022

US stocks open higher after tech-led sell-off

US stocks open higher after tech-led sell-off

US stocks rose on Wednesday, putting major indexes on track to recoup some of their losses after selling sharply the previous day.

The Standard & Poor’s 500 added 1.2% and the Dow Jones Industrial Average increased 0.9%, or about 310 points. The technology-focused Nasdaq Composite advanced 1.6%.

The Nasdaq index recorded, on Tuesday, the largest percentage drop in one day since September 2020, while The Dow Jones fell more than 800 pointsas investors digested earnings reports and weighed concerns about inflation, the potential for rapid policy tightening by the Federal Reserve, and the spread of Covid-19 in China.

Major US stock indices are now down significantly for the year, with the S&P 500 down 11% and the Nasdaq Composite down 19%. On Tuesday, the Nasdaq closed at its lowest level since December 2020, reversing gains it made in 2021. The Russell 2000 index of small businesses closed Tuesday at its lowest level since December 2020.

Investors described Wednesday’s rally in US stock futures earlier in the day as a temporary recovery. Seema Shah, chief strategist at Principal Global Investors, said she sees the next moves in the stock market being either sideways or bearish.

Ms Shah said earnings “support the market to some extent, but I don’t think it’s enough to support it higher”. She said her team had moved to a neutral recommendation on the overall equity positions.

“The risks are just piling up,” she said. “We don’t want to collect pennies in front of the steamer.”

Several major companies are reporting earnings this week, with results due after the closing bell on Wednesday from companies including parent Facebook.

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And

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TwitterAnd

who this week She agreed to sell herself for $44 billion to Elon Muskto report on Thursday.

Nearly 80% of the S&P 500 companies that have reported earnings to date have exceeded analyst estimates,

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Display data. However, Emily Rowland, chief investment strategist at John Hancock Investment Management, said investors remain focused on a number of broad issues weighing on the markets.

“Markets are mostly focused on some of the macro concerns related to the more hawkish Fed policy, as well as the global growth concerns that are taking place now,” she said.

Many of these concerns I paid the dollar to its highest level in more than two years. The dollar tends to strengthen when the global economy is deteriorating and when investors expect growth in the US to outpace the rest of the world. The higher interest rates in the US also benefit the US currency, as higher interest rates attract investors looking for returns on the currency.

The ICE US dollar index, which measures the currency against another basket, rose 0.7% to 103.06, on course to finish at its highest level since January 2017 and even surpass the market slump caused by the coronavirus in March 2020. Including on Wednesday, the index rose in All but two of the 18 trading sessions are in April.

while, The euro fell 0.8% against the dollar to about $1.06, the lowest level since 2017.

In the bond market, the 10-year US Treasury yield fell to 2.772% on Wednesday from 2.773% on Tuesday. Recently, investors have been selling bonds in anticipation of higher interest rates, and benchmark bond yields are still close to the highest level since 2018. Bond yields and prices are moving inversely.

Natural gas prices in Europe rose 4.3% after having earlier jumped more than 20% on Wednesday. These moves came after Russia said it would do so stop the flow of gas Poland and Bulgaria for their refusal to pay the new Moscow terms.

between individual stocks,

Tesla

It added 4.3%, on course to recoup some of its losses after falling 12% on Tuesday Biggest drop for a day in more than a year. Twitter is down 1.4%, about 9% below $54.20 per share

Elon Musk

And Twitter agreed in their agreement to make the company private.

Microsoft

jumped 5.5% after it reported on Tuesday that fourth-quarter revenue and profit rose The demand for its cloud services and software continues to rise.

On Tuesday, the Nasdaq Composite posted its biggest one-day percentage drop since September 2020, while the Dow Jones Industrial Average fell more than 800 points.


picture:

Michael Nagel/Zuma Press

Chipotle Mexican Grill

The company added 4.8% after the burrito chain said total revenue increased 16% in the fourth quarter amid rising food, beverage and packaging costs — which the company said was partially offset by increases in menu prices.

Lucid Group

It gained 4.4 percent after the company said late on Tuesday that the government of Saudi Arabia had agreed to it Buy up to 100,000 vehicles over 10 years.

In contrast, Google parent

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It fell 2.1% after the tech giant reported slower sales growth Amid turmoil in digital advertising spending.

Robinhood Markets

It fell 0.8% after the online brokerage said it was Laying off 9% of its full-time employees. The company is due to report earnings on Thursday.

In commodities, Brent crude, the international benchmark for oil prices, fell 1.3% to $103.20 a barrel.

Abroad, European shares rose, with the Stoxx Europe 600 adding 0.8%. Major markets in Asia were mixed, with benchmarks in Japan and South Korea down more than 1% and Chinese benchmarks rising.

The CSI 300 of the largest stocks listed in Shanghai and Shenzhen rose 2.9%, recovering some of its recent losses. In Hong Kong, the Hang Seng Index rose 0.1%.

The recovery came after China on Tuesday reported a level Lowest number of Covid-19 cases in three weeksand President Xi Jinping highlighted the importance of infrastructure for economic growth, with a focus on transportation, energy and water conservation. Stocks of machinery and building materials jumped.

Karen Langley contributed to this article.

Write to Caitlin McCabe at [email protected] and Dave Sebastian at [email protected]

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