Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Stocks - Wall Street Rebounds Sharply After Monday's Drubbing

Stock MarketsAug 06, 2019 05:37PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

Investing.com - U.S. stocks rebounded strongly Tuesday after China stabilized its currency and investors snapped up bargains.

The market gained back roughly 40% of what it lost on Monday when stocks suffered their worst one-day losses of the year.

The S&P 500, down 3% on Monday, gained back 1.33% on Tuesday. The Dow Jones Industrial Average, which fell 767 points Monday, rose more than 1.22%. The Nasdaq Composite was up 1.39% after falling 3.5% on Monday.

At first, the impetus fwas China announcing it would value its currency, the yuan, at 7 to the dollar. The government let the yuan slump Monday against the dollar to retaliate against President Donald Trump's decision to impose 10% tariffs on Chinese goods imported into the United States starting Sept. 1.

Both decisions, plus a U.S. announcement that it was branding China a currency manipulator, were clear signals that optimism early in the year that a new trade deal was close was unfounded. Now the worry is the trade fight would extend well into 2020, bringing with it the prospect of more painful market volatility.

Twenty-four of the 30 Dow stocks were higher, along with 87 stocks in the Nasdaq 100 index, which was up 1.4%. On Monday, all of the stocks in both indexes finished in the red.

The market was led by strength in technology stocks, especially Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Facebook (NASDAQ:FB) and Google parent Alphabet (NASDAQ:GOOGL). In addition, consumer stocks such as Nike (NYSE:NKE), Lululemon Athletica (NASDAQ:LULU )and Ulta Beauty (NASDAQ:ULTA) were winners.

The only weak spots in the market were energy and materials stocks.

Oil prices were lower, a byproduct of the trade fight. West Texas Intermediate crude fell 1.94% to $53.63 a barrel and is down 8.45% in August. Brent crude, the global benchmark, settled at $58.94, down 1.45%. It's dropped 9.6%, mostly on the worries over the U.S.-China trade fight.

Among the losers in the energy sector were BP (NYSE:BP), Chesapeake Energy (NYSE:CHK), Halliburton (NYSE:HAL) and Schlumberger (NYSE:SLB).

Chemical stocks slumped. Dow Inc. (NYSE:DOW) hit a 52-week low. U.S. Steel (NYSE:X) and Alcoa (NYSE:AA) also moved lower.

:SLB).

The rally was almost a guarantee after Monday's selloff because technical levels, such as relative strength indexes, dropped so low so fast as to signal -- loudly -- that much of the stock market had become undervalued.

The major averages had been drifting lower since hitting record highs on July 25 and you don't know how markets will perform going forward -- especially with the trade fight continuing.

A worry for Wednesday's market as well may be an earnings disappointment after the market closed from Dow component Walt Disney (NYSE:DIS).

Disney blamed the disappointment on the costs of integrating the 21st Century Fox business acquired earlier this year in a $71.3 billion deal. Disney shares were off 2.5% after hours after rising 2.6% in regular trading.

Disney's movie business (what it calls studio entertainment) saw a 33% revenue increase, thanks to the success of such blockbuster film as "Avengers: Endgame."

Earnings are due Wednesday from companies including Booking Holdings (NASDAQ:BKNG), LYFT (NASDAQ:LYFT) and Overstock.com (NASDAQ:OSTK).

Winners and Losers in the S&P 500

Aerospace component manufacturer Transdigm Group (NYSE:TDG), software developer Take-Two Interactive Software (NASDAQ:TTWO) and Zletis, maker of medicines and pharmaceuticals, were among the top S&P 500 performers for the day. Zoetis was spun out of Pfizer (NYSE:PFE) in 2013.

International Flavors & Fragrances (NYSE:IFF), fertilizer maker Mosaic (NYSE:MOS) and generic drug maker Mylan NV (NASDAQ:MYL) were among the S&P 500 laggards.

Stocks - Wall Street Rebounds Sharply After Monday's Drubbing
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
Kanok C.
Kanok C. Aug 06, 2019 8:23PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
dead cat bounce
Eric Williamson
Eric Williamson Aug 06, 2019 7:25PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Is anything a bargain near record highs and after a decade of a bull run? The previous sessions falls were sharper than the rebound today. I would put it more like, 'Markets recover some poise after falling from record highs', though that might just be me...Chat of the 'Everything Rally' has awakened my inner bear. Rawr.
Daniel Hall
Daniel Hall Aug 06, 2019 7:25PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Not just you. Think August is going to be a bad month for Bulls. If a trade deal is reached in September, the nosedive might level or rebound, but it still might take months for global markets to recover - A Bull
Eden Huang
Eden Huang Aug 06, 2019 7:25PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Seriously... if they want a deal they would have sealed it long ago...it’s all about raising prices to counter tepid inflation...
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email