Bargain Hunting Contributes To Significant Rebound On Wall Street

Business

Following the substantial downturn seen over the course of the previous session, stocks showed a strong move back to the upside during trading on Thursday. The major averages all finished the day firmly positive, with the Dow posting a particularly strong gain.

The Dow spiked 617.75 points or 1.8 percent to 34,639.79 and the S&P 500 jumped 64.06 points or 1.4 percent to 4,577.10. The tech-heavy Nasdaq showed a lack of direction early in the session but closed up 127.27 points or 0.8 percent at 15,381.32.

The rebound on Wall Street partly reflected bargain hunting following the steep drop seen as Wednesday’s trading day progressed.

The significant downturn on Wednesday dragged the Dow down to a nearly two-month closing low, while the Nasdaq and S&P 500 hit their lowest closing levels in over a month.

The strong move to the upside extended the rollercoaster ride stocks have been on since news of the detection of omicron variant of the coronavirus.

Traders have seemed extremely sensitive to omicron-related news amid concerns the variant could derail the economic recovery even as the Federal Reserve begins scaling back stimulus.

The notable advance by the Dow was partly due to a strong gain by shares of Boeing (BA), with the aerospace giant jumping by 7.5 percent.

Boeing spiked following news China has cleared the 737 Max to return to flying, becoming the last major market to grant approval.

Additionally, a report from Bloomberg said the new owners of Jet Airways India Ltd. are in talks with Boeing and Airbus to purchase at least 100 narrowbody jets for the once-bankrupt carrier’s fleet.

Dow components American Express (AXP) and Visa (V) also posted standout gains, with the credit card giants surging up by 4.5 percent and 4.3 percent, respectively.

In U.S. economic news, the Labor Department released a report showing a modest rebound by initial jobless claims in the week ended November 27th.

The report said initial jobless claims rose to 222,000, an increase of 28,000 from the previous week’s revised level of 194,000.

Economists had expected jobless claims to climb to 240,000 from the 199,000 originally reported for the previous week.

Sector News

Airline stocks showed a substantial rebound on the day, with the NYSE Arca Airline Index soaring by 6.5 percent after plummeting to its lowest closing level in a year in the previous session.

Considerable strength was also visible among housing stocks, as reflected by the 4.1 percent spike by the Philadelphia Housing Sector Index.

Banking stocks also turned in a strong performance, driving the KBW Bank Index up by 3.4 percent. The index bounced off a two-month closing low.

Steel, energy and brokerage stocks also saw significant strength, while gold stocks bucked the uptrend amid a decrease by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan’s Nikkei 225 Index fell by 0.7 percent, while Hong Kong’s Hang Seng Index rose by 0.6 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the U.K.’s FTSE 100 Index slid by 0.6 percent, the French CAC 40 Index and the German DAX Index tumbled by 1.3 percent and 1.4 percent, respectively.

In the bond market, treasuries have moved modestly lower over the course of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.2 basis points at 1.456 percent.

Looking Ahead

The Labor Department’s closely watched monthly jobs report is likely to be in the spotlight on Friday, overshadowing separate reports on service sector activity and factory orders.

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