Sun, Jul 03, 2022 page10

• Wall Street rebounds on first day of Q3

  NO HOPES UP: All three of the US’ major stock indices posted a weekly loss, while the microchip sector took a dive after Micron Technology Inc warned of slowing demand

  • Reuters, NEW YORK
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  Wall Street on Friday bounced back to a sharply higher close in light trading, as investors embarked on the second half of the year ahead of a long holiday weekend.

  All three major US stock indices reversed early losses to close well into positive territory in the wake of the stock market’s worst first half in decades.

  However, all three posted losses for the week.

  

  “We’re headed into the holiday weekend and having a late-day relief rally, but we’ll likely have to wait until investors return from the holiday weekend to see if it’s sustainable at the start of the new quarter,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta.

  Market participants now look to the second-quarter earnings season, the US Department of Labor’s June employment report, and the US Federal Reserve’s monetary policy meeting expected later this month.

  The microchip sector dropped sharply after Micron Technology Inc warned of cooling demand.

  

  A trader works on the floor at the New York Stock Exchange on Friday.

  Photo: AP

  Micron’s shares slid 2.9 percent, pulling the Philadelphia SE Semiconductor index down 3.8 percent.

  Worries over waning demand in the face of decades-high inflation were reflected in the Institute for Supply Management’s (ISM) purchasing managers’ index, which showed a deceleration in both input prices for new orders.

  ISM’s report seemed to back the view that the economy is cooling and inflation appears to be past its peak. This has raised the possibility that the Fed might have wiggle room for a dovish pivot after its second straight 75 basis-point interest rate hike expected in July.

  “The Fed is going to need to see a lot more evidence to change its mind about further continued interest rate hikes,” said Tim Ghriskey, a senior portfolio strategist at Ingalls & Snyder in New York. “There’s still a lot of uncertainty about the economy and inflation, despite early signs that inflation may have peaked.”

  The Dow Jones Industrial Average rose 321.83 points, or 1.05 percent, to 31,097.26, the S&P 500 gained 39.95 points, or 1.06 percent, to 3,825.33 and the NASDAQ Composite added 99.11 points, or 0.9 percent, to 11,127.85.

  For the week, the Dow fell 1.28 percent, the S&P 500 declined 2.21 percent and the NASDAQ dropped 4.13 percent.

  All 11 of the S&P 500’s major sectors ended the session green, with utilities enjoying the largest percentage gain.

  The second-quarter reporting season begins in several weeks, and 130 of the companies in the S&P 500 have preannounced.

  Of those, 45 have been positive and 77 have been negative, a weaker negative/positive ratio than a year earlier, Refinitiv data showed.

  The prospect of profit margins taking a hit from bruising inflation and waning consumer demand would have market participants listening closely to forward guidance.

  Analysts now expect aggregate second-quarter S&P 500 earnings growth of 5.6 percent, down from the 6.8 percent projected by Refinitiv at the beginning of the quarter.

  Advancing issues outnumbered declining ones on the NYSE by a 2.77-to-1 ratio; on the NASDAQ, a 1.57-to-1 ratio favored advancers.

  The S&P 500 posted one new 52-week high and 48 new lows, while the NASDAQ Composite recorded 12 new highs and 219 new lows.

  Volume on US exchanges was 11.01 billion shares, compared with the 12.88 billion average over the past 20 trading days.
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