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S&P 500 Rallies as Bulls Swoop in to Buy Battered Stocks Following Rout

Stock MarketsJun 21, 2021 01:32PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 jumped Monday, as bargain-hunting investors took advantage of the last week's sea of red in the market, swooping in to buy economically-sensitive cyclicals stocks.

The S&P 500 rose 1.2%, the Dow Jones Industrial Average jumped 1.63%, or 542 points, and the Nasdaq Composite was up 0.69%.

Energy led the broader market higher, up 3% as investors continued to bet on higher oil demand, while the prospect of return of Iranian supply was pushed out further after Ebrahim Raisi won the country’s presidential election.

Raisi told reporters that Iran wouldn't “negotiate for the sake of negotiations” and ruled out any meeting with President Joe Biden. 

Banking stocks were also among the top gainers, underpinning the broader financials higher,  after a slump last week as U.S. yields rebounded from lows, with the United States 10-Year near 1.5% after trading as low as 1.35% intraday.

Bank of America (NYSE:BAC), and JPMorgan (NYSE:JPM) were up more than 1%, while Wells Fargo (NYSE:WFC) jumped nearly 3%.

The move higher in value stocks didn't serve up the rotation away from growth as technology also participated in the broader market melt up.

Google-parent Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT, Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB) were above the flatline, while Amazon.com (NASDAQ:AMZN) was in the red.

The positive swing in investor sentiment on stocks followed the worst week for the broader market since October as the Federal Reserve's hawkish tilt spooked investors.

“I put us starting in late 2022,”  St. Louis Federal Reserve President James Bullard said Friday during a TV interview on CNBC. "[M]y forecast said 3% inflation in 2021 -- core PCE inflation -- and 2.5% core PCE inflation in 2022."

But while the expectations for tighter monetary policy measures will weigh on valuations in 2022, companies are expected to generate sufficient earnings to drive the broader market higher.

"We expect earnings to drive returns in 2022. We estimate that earnings per share in the S&P 500 Index will increase to $220 in 2022, though rising interest rates could put downward pressure on price/earnings ratios in 2022," Wells Fargo said in a note.

"Our year-end median price target for the S&P 500 Index is 4,900," it added. That estimated price target represents about 14% upside from current levels.

In other news, DoorDash (NYSE:DASH) climbed 4% after teaming up with Albertsons to offer same-day grocery delivery from nearly 2,000 stores.

S&P 500 Rallies as Bulls Swoop in to Buy Battered Stocks Following Rout
 

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Comments (7)
Sean Livingstone
Sean Livingstone Jun 21, 2021 4:23PM ET
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The entire market is just about tricking retails.... nothing more nothing less.
lewis hughes
lewis hughes Jun 21, 2021 3:05PM ET
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This entire market should be moved OTC and have a risk warning.
Larry DeAngelis
Larry DeAngelis Jun 21, 2021 2:13PM ET
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Battered stocks? Does that mean 1% from their highs? Ridiculous
Hannah Smith
Hannah Smith Jun 21, 2021 2:13PM ET
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Better hyperinflate the currency some more...cannot let the stock market slip and billionaires lose some of their wealth. It is not a good sign when the rate of inflation and cost of living increases is outpacing the rate of stock market growth and wage growth. If socialists want to know what the issue in the world is, it is not that income tax is too low, it is that inflation and government spending is too high. Cost of living increases and wage stagnation is not a reflection of billionaires not paying enough income tax, it is a reflection of the government devaluing the currency.
Hannah Smith
Hannah Smith Jun 21, 2021 2:13PM ET
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I also like to mention that socialists who think that Bezos's wealth increasing $50 billion means that he has earned $50 billion in income is wrong. That is not how billionaire net worth works. Bezos's networth can go up $50 billion and he not make a single cent of income. The way billionaires become billionaires is by currency devaluation to pump the value of the stock holdings....it is why billionaires promote socialist agenda....they can make more from currency devaluation than the risk of higher income tax, which primarily hurts the middle class.
lewis hughes
lewis hughes Jun 21, 2021 2:13PM ET
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better hyperinflate the currency some more....cannot let the stock market slip and stabilize cost of living increases
Mitchel Pioneer
Mitchel Pioneer Jun 21, 2021 2:04PM ET
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The "market" is a fraudulent, criminally manipulated joke.
Carlos GV
Carlos GV Jun 21, 2021 2:04PM ET
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what and who isnt???
Brandon Wooton
Brandon Wooton Jun 21, 2021 1:54PM ET
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ppt is back from "holiday"
Amine Fourali
Amine Fourali Jun 21, 2021 1:50PM ET
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Bargains...lol
Morne de Wet
Morne de Wet Jun 21, 2021 1:48PM ET
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No way this will happen lining up everyday Joe's to whack them this is all it is legal robbery
 
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