Sun, Jun 26, 2022 page10

• Wall St mints big gains to end week

  ‘RELIEF RALLY’: Investors are trying to determine when the market would bottom out, while a strategist warned against ‘going in with both hands at the moment’

  • Reuters
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  Wall Street’s main indices soared on Friday in a broad rally as signs of slowing economic growth and a recent pullback in commodity prices tempered expectations for the US Federal Reserve’s rate hike plans.

  The S&P 500 rose more than 3 percent for its biggest one-day percentage rise since May 2020. All 11 of the benchmark index’s sectors ended at least 1.5 percent higher.

  Stocks rebounded this week as financial markets have been roiled over worries that rapid rate hikes by the Fed to rein in 40-year-high inflation could cause a recession.

  

  Still, investors have been gauging when the market might hit its bottom after the benchmark S&P 500 earlier this month recorded a 20 percent drop from its January closing peak, confirming the common definition of a bear market.

  “Some of the moves, the sellers just get exhausted so you don’t have as much capital moving out,” TD Ameritrade head trading strategist Shawn Cruz said.

  “This might be a little bit of a relief rally,” Cruz said. “But I think I would not encourage anyone to start going in with both hands at the moment, because we have seen this repeatedly where these things can reverse themselves pretty quickly.”

  The Dow Jones Industrial Average rose 823.32 points, or 2.68 percent, to 31,500.68, the S&P 500 gained 116.01 points, or 3.06 percent, to 3,911.74 and the NASDAQ Composite added 375.43 points, or 3.34 percent, to 11,607.62.

  For the week, the S&P 500 rose 6.4 percent, the Dow added 5.4 percent, the NASDAQ gained 7.5 percent.

  Volume surged toward the end of the session as the close of trading marked the completion of FTSE Russell’s reconstitution of its indices that are tracked by trillions of dollars in investor funds.

  US consumer sentiment fell to a record low this month, but Americans saw a marginal improvement in the outlook for inflation, a survey showed on Friday. Data on Thursday pointed to slowing US business activity this month.

  Helping ease inflation fears was a sharp drop in commodity prices this week. The Refinitiv/CoreCommodity Index, which measures prices for energy, agriculture, metals and other commodities, fell to a roughly two-month low on Thursday after hitting a multiyear peak earlier this month.

  Fed funds futures traders are now pricing for the benchmark rate to rise to about 3.5 percent by March, down from expectations last week that it would increase to about 4 percent.

  “The expectation of future rate hikes coming down is part of the equation that makes today’s equity market so strong,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

  Bank stocks rallied, with the S&P 500 banks index rising 3.7 percent, after the Fed’s annual “stress test” exercise showed that the lenders have enough capital to weather a severe economic downturn.

  In company news, FedEx Corp shares jumped 7.2 percent after the parcel delivery company issued a stronger-than-expected full-year profit forecast.

  Advancing issues outnumbered declining ones on the New York Stock Exchange by a 4.66-to-1 ratio; on NASDAQ, a 2.15-to-1 ratio favored advancers.

  The S&P 500 posted one new 52-week high and 29 new lows; the NASDAQ Composite recorded 34 new highs and 86 new lows.

  More than 19 billion shares changed hands in US exchanges, compared with the 12.9 billion daily average over the past 20 sessions.
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