NEW YORK: US stock indices rebounded on Tuesday (June 27) from a recent losing streak as upbeat economic data soothed investor worries about an imminent recession triggered by the Federal Reserve’s aggressive interest rate increases.
The blue-chip Dow Jones Industrial Average snapped a six-day losing streak on Tuesday while the tech-heavy Nasdaq Composite was eyeing its best first-half performance in 40 years and the S&P 500 advanced after falling in five of the last six sessions.
The Dow Jones Industrial Average rose 212.03 points, or 0.63%, to 33,926.74; the S&P 500 gained 49.59 points, or 1.15%, at 4,378.41; and the Nasdaq Composite added 219.90 points, or 1.65%, at 13,555.67.
“There was a lot of US economic data released today and the key takeaway was that the economy is not breaking just yet,” said Oanda’s Edward Moya.
Separate reports showed new orders for key US-manufactured capital goods unexpectedly rose in May, and sales of new single-family homes surged in the same month, while US consumer confidence increased to a near 1½-year high in June.
The data gave investors a reason to buy back into stocks after a “pretty vicious correction” in the last several sessions, said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
“What we have today is this series of economic releases that on balance fit this setting of an economy that continues to be in an expansionary mode, without at the same time suggesting there’s any condition that’s running too hot.”
And just days before the second quarter ends, Luschini said it was notable that some the top sector performers on Tuesday, such as consumer discretionary and technology , were also the market's biggest gainers on a year-to-date basis.
While the economic data was encouraging, Rhys Williams, chief strategist at Spouting Rock Asset Management, said the market was likely helped by so-called window-dressing, when fund managers add outperforming assets to their portfolio for their quarter-end statements.
“You’d a bad week in the stock market last week and a bad day on Monday. It’s just a bit of recovery,” he said. “There could be some quarter-end window-dressing too as we get close to the end of the quarter.”
Traders were pricing in a roughly 77% chance the Fed will raise interest rates by 25 bps to the 5.25%-5.50% range in its July meeting, according to CME Group's Fedwatch tool, up from 74.4% a day earlier.
“Today (was) a very strong indication that the bulls remain in control,” said Adam Sarhan of 50 Park Investments. “The market had every chance in the world to fall and instead it’s going up.”
More economic data is expected this week, including a key inflation measure, as well as Fed chair Jerome Powell’s speech at the European Central Bank Forum in Sintra, Portugal, which could provide cues on the path of interest rates.
Market heavyweights Microsoft Corp and Apple Inc were among the biggest boosts to the S&P 500 during the session, along with Amazon.com Inc, Tesla Inc and Nvidia Corp.
Meta Platforms Inc shares rose 3% after Citigroup raised its price target on the stock. – Reuters, AFP
Source: The Sun Daily
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