New York: Wall Street stocks finished with solid gains today after a rollercoaster session, winning back a good portion of the losses from the prior session’s rout.
After a swing of about 1,200 points during the session, the Dow Jones Industrial Average finished with a gain of almost 570 points, or 2.3 percent, at 24,912.77, near its session peak. Even with the rebound, the Dow has fallen 6.4 percent since the record set January 26.
The broad-based S&P 500 advanced 1.7 percent to end at 2,695.14, while the tech-rich Nasdaq Composite Index jumped 2.1 per cent to 7,115.88.
“The mood on the floor is relief,” said FTN Financial chief economist Chris Low, adding that the Dow’s “violent” descent yesterday — at one point losing 700 points in a few minutes — would not soon be forgotten.
“It reminds me of the deep ocean sailors I know,” Low said. “They love it, but they’re also respectful and terrified.”
Several of the biggest US equities enjoyed handsome gains after being battered in yesterday’s selloff, which saw the Dow fall 1,175, the biggest point drop on record.
These included Dow members Apple, Home Depot and Chevron, all of which recovered more than four percent.
Many analysts see worries about higher US interest rates and excessive valuations as the catalyst for a pullback that was amplified by computerized trading mechanisms that can exacerbate movements in stocks.
“The market is probably trying to find a bottom,” said Bill Lynch, director of investment at Hinsdale Associates. “Today has been particularly volatile, trading between positive and negative territory all day long. It’s like a yo- yo.”
But inevitably investors took advantage of the sharp drop in prices to come back into the market, sending the key indexes higher.
“The economy is still strong,” Lynch said. “I don’t see the possibility of a recession any time soon.”
Low agreed that the overall economic outlook remained upbeat, but said investors may see more volatility ahead.
A key question is how new Federal Reserve Chair Jerome Powell and new voting members of the policy-setting Federal Open Markets Committee will respond if inflation rises significantly.
“There are still a lot of unanswered questions,” Low said. “There’s no question the economy is just roaring.