NEW YORK: Wall Street stocks bounced back yesterday starting a holiday-shortened week on a positive note as investors debated whether the rally could signify a market comeback.
After bruising losses last week, the Dow Jones Industrial Average finished up 2.2% at 30,530.25.
The broad-based S&P 500 jumped 2.5% to close at 3,764.79, while the tech-rich Nasdaq Composite Index also won 2.5% to 11,069.30.
Analysts described the market as primed for a rally after heavy losses for most of 2022 that have left stocks “oversold” on a short-term basis.
A series of aggressive interest rate increases by the Federal Reserve and other central banks have exacerbated worries about a recession.
Goldman Sachs analysts now see a 48% probability of a recession in the next two years compared with 35% previously, according to a note released late yesterday.
“The question becomes: Is this another bear market rally, which means it’ll last for a little bit of time and then roll over and hit new lows, or is it the bottom, meaning a more sustained rally is going to follow,” said Adam Sarhan of 50 Park Investments.
Quincy Krosby of LPL Financial was encouraged by yesterday's strong finish to the trading day.
“By every metric, the market was oversold. And therefore, the market was due for a bounce, a rally,” Krosby said.
Among individual companies, Kellogg jumped 2.0% after unveiling a plan to split into three companies, including a growth-oriented venture around the cereal brand's global snacks brand.
Lennar gained 1.6%after the homebuilder reported higher profits. The company has seen a low level of cancellations, but cautioned that higher borrowing rates were a concern. – AFP
