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Wall Street ends up 2% after sharp reversal; technicals help

Published 10/13/2022, 05:03 AM
Updated 10/13/2022, 06:52 PM
© Reuters. FILE PHOTO: Raindrops hang on a sign for Wall Street outside the New York Stock Exchange in Manhattan in New York City, New York, U.S., October 26, 2020. REUTERS/Mike Segar

© Reuters. FILE PHOTO: Raindrops hang on a sign for Wall Street outside the New York Stock Exchange in Manhattan in New York City, New York, U.S., October 26, 2020. REUTERS/Mike Segar

By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. stocks surged to close more than 2% higher on Thursday, as technical support and investors covering short bets drove a dramatic rebound from a selloff earlier in the day.

The reversal marked a jump of nearly 194 points in the S&P 500 from its low of the session to its high, the biggest intraday jump for the index since Jan. 24.

Financials and energy led gains among S&P 500 sectors.

The market initially dropped after data showed the headline consumer price index rose at an annual pace of 8.2% in September, compared with an estimated 8.1% rise.

"People were perhaps net short going into the CPI report, and saw the report being negative and started covering their shorts," said King Lip, chief investment strategist at Baker Avenue Asset Management in San Francisco.

Some strategists also pointed to some technical support levels around the 3,500 mark for the S&P 500.

The Dow Jones Industrial Average rose 827.87 points, or 2.83%, to 30,038.72, the S&P 500 gained 92.88 points, or 2.60%, to 3,669.91 and the Nasdaq Composite added 232.05 points, or 2.23%, to 10,649.15.

"It's technical factors," Lip said, adding that the recent steep selloff in stocks may mean "bad news may have already been discounted.

"Going into earnings season, all we really need is things to be not as bad as suspected," he said.

Big Wall Street banks kick off third-quarter reporting season on Friday, with investors awaiting to see how a high interest-rate environment affects their profits.

Walgreens Boots Alliance (NASDAQ:WBA) Inc rose following better-than-estimated fourth-quarter results.

Advancing issues outnumbered declining ones on the NYSE by a 2.24-to-1 ratio; on Nasdaq, a 2.10-to-1 ratio favored advancers.

© Reuters. FILE PHOTO: Raindrops hang on a sign for Wall Street outside the New York Stock Exchange in Manhattan in New York City, New York, U.S., October 26, 2020. REUTERS/Mike Segar

The S&P 500 posted three new 52-week highs and 172 new lows; the Nasdaq Composite recorded 51 new highs and 600 new lows.

Volume on U.S. exchanges was 13.39 billion shares, compared with a roughly 11 billion average for the full session over the last 20 trading days.

Latest comments

market likes high interest rate so much it rallied. bring on higher rates. why 75 bps? make it 200 bps. the higher the better.
it rallied on technicals as the s&p hit the 3500 support level. now we wait to see if we reach a lower high then lower low or higher high then higher low( keeping emotions out of the equation)
I sold my November puts at open this morning (except my December ones). Then I played the gamble when it pumped to around 361 and 365 the first time and bought puts for tomorrow and next week. Then got burned bad when it didn't break back down. All with money I gained from the last 3 weeks in puts though. I guess I'll see what happens tomorrow. I suspect more pain for puts but I'll role them into November puts if it continues upwards.
planning trades prior to such big data and days is high risk play. Many put buyers who were greedy got sucked by market yesterday. Always trade as a reaction to market action..trading is about developing good habits and staying away from high risk setups.
Headline - cpi is used as trap by 💰💰 and 🐻🤡 got smashed.
I also fall a victim as I had a short POSTION in EURUSD. I still had a belief that the markerts keep in the direction of the news
COLA increase 8.7% for 2023 is good. maybe a 10%+ increase for 2024 is highly likely. Fed's utter failure is obvious. fed should apologize to America people. this kind of colossal failure in a firm setting would require immediate dismissal.
It is unfortunate that it seems spam has slowly taken over the comment sections of investing.com
I agree. managers need to take care of that ********
First title in a long time that credits where credit is due…. Technicals
Algos helped Wall St rebound. No sane human being would have bought this morning!
Technicals were short circuited by artificial Treasury buying ahead of the mid term elections. The inputs were screaming sell . This is a truly fixed market and you can see the artificial long candle stick propelling stocks to a 'safe' support at 30000 on DJ. Understandably all the voters 401K rely on this critical support point between 29K and 31K  . No this was a completely artificial buy at the Black Rock proxy trading desk in the Treasury.
Account washed out today😭
Was it short-covering rally? whatever. Now market is falling like whatever
Can banks buy stocks and use credit default swaps to protect them from losses?
Ah, the good, old "bad news may have already been discounted"-excuse. I already wondered where it went
So basically sell some more?
 no the mid terms are next month . Don't sell into this buy until after Christmas . Treasury want stocks supported at the current 20% correction point. That's where they are now.
where US markets are falling??? no need of this news anymore. the markets are going boom boom
Omg this will fall so fast. Just another chance for mm to take profit. We have a long long way down to go before we even can start thinking of a bottom
Don't try to tell the truth here or you'll be censored.
They also don't like you saying words with n gative connotations either. Tried to say the word "K ! ||" in reference to the US dollar and it got censored out. This is a pathetically "woke" run website. At least most of the commenters here are a good mix of political viewpoints. That's about the only redeeming quality of this website.
 Yeah, apparently they don't like calling talking heads lie yers. :)
Its just a word filter. Poorly programmed, yes, but its just filtering words, not opinions.
These guys are all liars that just want to manipulate dumb money while they do the opposite and book profits. If you want to know what's really going to happen, look at bonds not equities.
2YR yield up 3.7% so far today. It's going to hurt...
low volume rally....
Algo manipulation
Michael hayes must really be loosing his ….
Bay the deeb 😂😂😂mother ****ers
So we cant even get the market to come to reasonable levels but keep hollering about inflation lol , well maybe if we stop pumping the markets on every drop things can actually come down on price 😂
True, but failing markets can't be blamed on the Dems so the manipulated charade goes on. These aren't markets anymore they need to change the name to something like. 'Fed inspired casino '
Wall St revels while Main St starves...Stocks up!
I see Gold only goes down with markets not up .. absurd
Alice in Wonderland markets. Thanks FED and PPT for making everything surreal
Honestly 🍿🍿🍿🍿🍿🍿Totally popcorn worthy!
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