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US stocks rise after Brutal Trading Week

US stocks rose on Friday after a disastrous week lost in major indices.

The S&P 500 rose 2.3% in early trading. The Dow Jones Industrial Average rose 480 points, or 1.5%, and the Nasdaq Composite rose 3.4%. All three indexes were on track for weekly losses of at least 2%.

Twitter TWTR – 8.55%

shares fell 9% after Tesla CEO Elon Musk tweeted that the deal to buy and take over the social media company was “temporarily suspended” pending details on the amount of fake accounts on the social media platform. Mr. Musk later tweeted that he was committed to the purchase, which helped Twitter reduce its previous market losses by more than 20%. Tesla shares rose 5.9% after tweets from Mr. Musk.

Movements higher in the broader market helped Nasdaq Composite gain a profit after the rally in Thursday’s final session. The sense of danger entered the international stock market overnight. In the U.S. on Friday morning, investors were gathering shares of technology companies that were hit before the initial bell.

Investors described the rebound as a break in market sales, which has put the top three U.S. indices in the pace of the worst week since the end of January. At the close on Thursday, the Nasdaq Composite fell 6.4% this week. The Dow is down 3.6%, extending its losses for the seventh week in a row, the longest loss since 2001.

“Buying this can only be a rally and a bounce of dead cats than anything else,” said Greg Swenson, founding partner of London-based investment bank Brigg Macadam. Looking ahead, he said he sees more losses for the U.S. stock market. “Large companies will also suffer with the market.”

More than three-quarters of S&P 500 companies reported a positive surprise earnings per share in the first quarter, in line with previous quarters, according to FactSet.

“I spend a lot of time talking to companies and listening to corporate conference calls, and all I can say is that I don’t collectively listen to the weakness of the companies I’m seeing on the stock market,” Andrew Slimmon said. Morgan Stanley is the Senior Portfolio Manager of Investment Management.

However, Mr Slimmon said major indices could fall this summer before they fully recover. “The classic capitulation indexes haven’t gone crazy,” he said, adding that he expected the Cboe Volatility Index to approach 40 and fund flows to be even more negative before calling this market bottom.

Investors are facing problems that have been unseen for decades, as inflation remains near a four-decade high. Many traders believe the risk of a recession is growing as the Federal Reserve tries to control price pressures. Many institutional and individual investors have begun to reject the engineering idea of ​​what the Fed calls soft landing, in which inflation has fallen but unemployment remains low and the economy continues to grow.

Inflation was so high last time that the Federal Reserve raised rates so much that it put the U.S. in a recession. Shall we repeat that today? WSJ’s Dion Rabouin explains why the Fed’s next steps are crucial. Photo: Kevin Dietsch / Getty Images

On Thursday, Fed Chairman Jerome Powell acknowledged that keeping inflation under control could cause a short-term blow to the economy, and said in the Marketplace radio program that “the process of lowering inflation to 2% will also hurt.”

He reiterated that more than half a percent increase would be appropriate at future meetings, but said the central bank could consider larger increases if economic data calls for such steps.

This week’s inflation report offered little consolation to investors, especially after the data showed that price pressures were largely broad-based. Even as gasoline prices plummeted, food prices rose, as did dining, air travel and other services, frightening investors who expected inflation to peak.

This forced many to sell riskier investments and accumulate in assets that were considered safer. Growth and technology stocks, which are typically hurting by higher interest rates, were particularly immersed. But feelings about risk-taking have multiplied elsewhere, and it has also led to large declines in cryptocurrencies.

“This week has been like a pivot in the markets. The mood has shifted from assessing whether we can live in an economy with higher rates [investors] asking, ‘Are we on the threshold of recession?’ ”Said Florian Ielpo Lombard, Head of Odier Investment Managers.

On Friday, however, tech stocks were among those who bounced back. Nvidia gained 8%, PayPal 5.2% and Netflix 4.5%.

Robinhood rose 22% when Sam Bankman -Fried, the founder of the FTX cryptocurrency exchange, reported buying a 7.6% stake in the brokerage. Duolingo rose 32% after the language learning platform reported a big jump in revenue and monthly active users.

Bitcoin rose to around $ 30,419 on Friday from $ 28,572.24 at 5 pm ET level on Thursday. However, elsewhere in the cryptocurrency markets, the stable currency of TerraUSD continued to fall, trading at 11 cents. The so-called Stablecoin for its usual $ 1 penny, TerraUSD broke that level last weekend after a wave of token sales. Her sister token Luna has also dropped dramatically this week, trading at half a penny, below $ 60 on Monday.

Traders were working on the floor of the New York Stock Exchange on Thursday.


Photo:

John Minchillo / Associated Press

In the bond market, the yield on the 10-year US Treasury rose to 2.906% on Thursday from 2.815% when investors rallied in bonds reversing the four-day yield decline. Yields rise as bond prices fall.

The WSJ Dollar Index, which measures the greenback against a basket of other currencies, rose 0.1%. As of Thursday, it had risen six consecutive sessions, gaining about 2.3% in the period.

Foreign stock markets also rose on Friday. In Europe, the Stoxx Europe 600 increased by 1.6%. In Asia, Hong Kong’s Hang Seng rose 2.7% and Japan’s Nikkei 225 rose 2.6%. The Shanghai compound gained 1%.

-Caitlin Ostroff contributed to this article.

Write to Caitlin McCaberi at caitlin.mccabe@wsj.com

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US stocks rise after Brutal Trading Week

Source link US stocks rise after Brutal Trading Week

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