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S&P 500 Stages Rebound on Dip-Buying Activity

Stock MarketsJul 20, 2021 01:59PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 rebounded Tuesday, recovering from the prior-day rout as bargain-seeking investors piled into beaten down cyclical stocks amid a rebound in U.S. bond yields.  

The S&P 500 rose 1.7%, the Dow Jones Industrial Average gained 1.7%, or 584 points, the Nasdaq was up 1.8%.

The United States 10-Year yield  rose above 1.2% after dropping to 1.14% earlier in the session, providing a much needed boost to financials, mostly bank stocks following Monday's selloff.

JPMorgan (NYSE:JPM), Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC) rose more than 2%. 

The selloff on Monday was largely attributed to fears that a resurgence in Covid-19 infections would stall the recovery. Others, however, suggest the selloff was also likely driven by investor positioning.

"Although, with the economic recovery more than solid and nominal case numbers still extremely restrained, the drop-off is also likely a reflection of 'positional issues' in the market, as one news outlet described it," Stifel said.

But some on Wall Street suggest the economy has transitioned from a recovery stage to an expansion phase.

"The most visible signs of the transition have been the return of inflation-adjusted output in June to pre-pandemic levels; productivity-enhancing investment in high-tech equipment; broadening loan growth beyond consumers to businesses; and strong job gains as businesses gained renewed confidence," Wells Fargo (NYSE:WFC) said in a note.

Energy also recovered some of its losses from a day earlier, up more than 2% amid a tentative rebound in oil prices as the delta wave threatens demand.

"Our bottom-up estimate of the impact that a Delta wave could have on global demand instead points to a potential 1 million-barrel-a-day hit for only a couple months, and even less if vaccines prove effect at lowering hospitalizations in DMs, the origin of most summer demand improvements," Goldman Sachs said.

Energy was given an added boost from a 3% surge in Halliburton (NYSE:HAL) as the oil services company reported results that topped market expectations.

Technology stocks also benefited from dip-buying, with Apple (NASDAQ:AAPL), in the ascendency, up more than 2%

UBS lifted its price target on Apple to $166 from $155, after raising estimates on tech giant's revenue and EPS for the third quarter to $74.7 billion and $1.01 from $71.3 billion and 95 cents, respectively.

Microsoft (NASDAQ:MSFT, Facebook (NASDAQ:FB), Google-parent Alphabet (NASDAQ:GOOGL), and Amazon.com (NASDAQ:AMZN) were higher.

International Business Machines (NYSE:IBM) rose 2% after its second-quarter results topped analysts estimates.

"We’re encouraged by momentum around our wider hybrid cloud thesis," Credit Suisse (SIX:CSGN) said in a note as it raised its price target on IBM to $167 from $165.

S&P 500 Stages Rebound on Dip-Buying Activity
 

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Comments (10)
Invest Right
Invest Right Jul 20, 2021 4:15PM ET
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Headline = market activity + most relevant news. No one can get into the minds of investors and actually verify why they buy and sell things at any given moment in time. It's just an educated guess at best. Take it as that, no more.
Mitchel Pioneer
Mitchel Pioneer Jul 20, 2021 3:25PM ET
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Can't wait to see if the criminally manipulated joke called the US Ponzi Scheme loses 200 points of its "gains" in the final 30 minutes, or will it miraculously set a closing high like usual, with sellers magically vanishing into the background?
NUNO LOUREIRO
NUNO LOUREIRO Jul 20, 2021 3:22PM ET
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Seel off, dip buying who belevies this market narrative ****** it's just algorithms previous manipulated the way the big whales want to
Matthew VS
Matthew VS Jul 20, 2021 3:05PM ET
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And we will lose it all over again tomorrow. The market has a near terminal illness and if we don't address the problems now, we will all be terminal losers in the not so distant future.
Stan Smith
Stan Smith Jul 20, 2021 2:59PM ET
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Who is buying the dip is my questions!
casual Lee
casualLee Jul 20, 2021 2:43PM ET
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tomorrow if market goes down, they'll blame "fear of delta variant".  if it goes up, they'll say due to strong earnings.
Jacob Steinschlag
Jacob Steinschlag Jul 20, 2021 2:27PM ET
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WHICH DIP?!?!
Matt Kay
Matt Kay Jul 20, 2021 2:22PM ET
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VIX is still at 21! Sell some strangles because we all know this manipulated market will never actually go down. Billionaires figured it out that by forcing fed to print 80B a week they will control not only most of the world's money but ALL OF IT.
Rosh Jardine
RoshJardine Jul 20, 2021 2:21PM ET
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Another trigger for automated trading bots to push the price up
Javier Escamilla
Javier Escamilla Jul 20, 2021 2:18PM ET
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Yesterday’s articles were the main reason i got into calls lol thanks for the heads up, just closed my contracts today :)
 
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