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Wall Street gains over 2% in broad rebound

Economy Jun 21, 2022 08:23PM ET
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© Reuters. FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 15, 2022. REUTERS/Brendan McDermid/File Photo

By Lewis Krauskopf, Devik Jain and Anisha Sircar

(Reuters) - Wall Street's major indexes jumped over 2% on Tuesday as investors scooped up shares of megacap growth and energy companies after the stock market swooned last week on worries over a global economic downturn.

All 11 major S&P 500 sectors gained, as stocks rebounded broadly after the benchmark index last week logged its biggest weekly percentage decline since March 2020.

Investors are trying to assess how far stocks can fall as they weigh risks to the economy with the Federal Reserve taking aggressive measures to try to tamp down surging inflation. The S&P 500 earlier this month fell over 20% from its January all-time high, confirming the common definition of a bear market.

"Do I think we have hit bottom? No. I think we are going to see more volatility, I think the bottoming process will likely take some time," said Kristina Hooper, chief global market strategist at Invesco. "But I do think it is a good sign to see investor interest."

The Dow Jones Industrial Average rose 641.47 points, or 2.15%, to 30,530.25, and the S&P 500 gained 89.95 points, or 2.45%, at 3,764.79. The Nasdaq Composite added 270.95 points, or 2.51%, at 11,069.30.

The energy sector, the top-gaining S&P 500 sector this year, surged 5.1% after tumbling last week. Every sector gained at least 1%.

Megacap stocks Apple Inc (NASDAQ:AAPL), Tesla (NASDAQ:TSLA) Inc and Microsoft Corp (NASDAQ:MSFT) all rose solidly to give the biggest individual boosts to the S&P 500. Apple rose 3.3%, Tesla jumped 9.4% and Microsoft added 2.5%.

The Fed last week approved its largest interest rate increase in more than a quarter of a century to stem a surge in inflation.

Investors are pivoting to Fed Chair Jerome Powell's testimony to the U.S. Senate Banking Committee on Wednesday for clues on future interest rate hikes and his latest views on the economy.

Investors are "trying to read the tea leaves to see how aggressive the Fed is going to get," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. "That's a hard question to answer right now because they are going to see what happens to the inflation story."

Meanwhile, Goldman Sachs (NYSE:GS) now expects a 30% chance of the U.S. economy tipping into recession over the next year, up from its previous forecast of 15%.

Graphic: VIX longterm - https://fingfx.thomsonreuters.com/gfx/mkt/zgpomdnwmpd/Pasted%20image%201655826597289.png

In company news, Kellogg (NYSE:K) Co shares rose about 2% after the breakfast cereal maker said it was splitting into three companies.

Spirit Airlines (NYSE:SAVE) shares jumped 7.9% after JetBlue Airways (NASDAQ:JBLU) said on Monday it sweetened its bid to convince the ultra-low cost carrier to accept its offer over rival Frontier Airlines' proposal.

Advancing issues outnumbered decliners on the NYSE by a 2.66-to-1 ratio; on Nasdaq, a 2.22-to-1 ratio favored advancers.

The S&P 500 posted one new 52-week high and 32 new lows; the Nasdaq Composite recorded 37 new highs and 122 new lows.

About 12.4 billion shares changed hands in U.S. exchanges, in line with the 12.4 billion daily average over the last 20 sessions.

Wall Street gains over 2% in broad rebound
 

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Comments (13)
Vladimir Vishnevetskii
Vladimir Vishnevetskii Jun 21, 2022 7:06PM ET
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going higher this week. Fed tomorrow will say what everyone already knows so the rally continues
Nils Hullmann
Nils Hullmann Jun 21, 2022 7:06PM ET
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and wrong
Kerry Ditto
Kerry Ditto Jun 21, 2022 4:26PM ET
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Persistant oil price strength is the current problem. It's the main culprit of inflation. Future direction is not certain.
Kerry Ditto
Kerry Ditto Jun 21, 2022 4:19PM ET
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Today's uptick might be one day wonder super rally.
Ac Tektrader
Ac Tektrader Jun 21, 2022 2:49PM ET
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just another predictable rally in a bear market. I see Mitchel still ignorant about seasonality and bear markets.
my life my rule
my life my rule Jun 21, 2022 2:29PM ET
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indian market huge profit from cheap russian oil... European are suffering
Stan Smith
Stan Smith Jun 21, 2022 2:25PM ET
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Yippee...inflation, war, food shortages and consumer debt are a thing of the past!...wait....
Andy Huang
Andy Huang Jun 21, 2022 1:30PM ET
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Quadruple witching + 200 DMA acting as support for a rebound; more pressure at this level to go long vs shorting; classic bear trap which will make one helluva short squeeze this week into next.
Kerry Ditto
Kerry Ditto Jun 21, 2022 1:02PM ET
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It's beginning of super bull market rally.
Steve Bojo
Steve Bojo Jun 21, 2022 1:02PM ET
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I’ll be happy to take your money
Mitchel Pioneer
Mitchel Pioneer Jun 21, 2022 12:52PM ET
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As predicted before the open, the sellers miraculously vanish, as the laughingstock of the investing world walks a 500 point tightrope.  The intraday swings experienced by every loss are magically nonexistent.  Will 70% of the manufactured "rally" be relinquished "in late trade?"  Criminally manipulated, predictable JOKE.
Ac Tektrader
Ac Tektrader Jun 21, 2022 12:52PM ET
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just another predictable rally in a bear market. I see Mitchel. doesn't understand seasonality or bear markets. he should find a different way to invest his money or find away to educate himself about trading markets.
Jack Nicholson
Jack Nicholson Jun 21, 2022 12:29PM ET
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once we're only down 19.9% the bear goes back to his cave. It's science
 
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