Bargain Hunting Contributing To Rebound On Wall Street
Stocks have moved mostly higher in morning trading on Tuesday, partly offsetting the weakness seen in the previous session. The major averages have all moved to the upside, with the tech-heavy Nasdaq showing a notable rebound.
Currently, the major averages are off their highs of the session but still firmly positive. The Dow is up 153.58 points or 0.5 percent at 33,098.82, the Nasdaq is up 120.57 points or 1 percent at 12,701.79 and the S&P 500 is up 28.07 points or 0.7 percent at 4,201.18.
The rebound on Wall Street may partly reflect bargain hunting, as traders pick up stocks at reduced levels following recent weakness.
The drop seen on Monday dragged the tech-heavy Nasdaq down to its lowest closing level in over a year, while the S&P 500 finished the day just above the nearly nine-month closing low set last Tuesday.
The markets continue to search for the bottom following the intense selling sparked by the Russia-Ukraine war and the subsequent spike in oil prices.
A continued sharp pullback by the price of crude oil has also generate some buying interest, with crude for April delivery plunging $8.40 to $94.61 a barrel after tumbling $6.32 to $103.01 a barrel on Monday.
Traders have also reacted positively to a report from the the Labor Department showing producer prices increased by slightly less than expected in the month of February.
The Labor Department said its producer price index for final demand climbed by 0.8 percent in February after surging by an upwardly revised 1.2 percent in January.
Economists had expected producer prices to advance by 0.9 percent compared to the 1.0 percent jump originally reported for the previous month.
Excluding prices for food, energy and trade services, core producer prices edged up by 0.2 percent in February following a 0.8 percent increase in January.
Buying interest has remained somewhat subdued, however, as traders look ahead to the Federal Reserve’s monetary policy announcement on Wednesday.
Airline stocks have moved sharply higher in morning trading, with the NYSE Arca Airline Index soaring by 5.9 percent.
Delta Air Lines (DAL), United Airlines (UAL) and Southwest Airlines (LUV) are posting standout gains after raising their revenue outlooks.
Considerable strength has also emerged among semiconductor stocks, which are regaining ground after falling sharply in the previous session.
The Philadelphia Semiconductor Index is climbing by 1.6 percent after ending Monday’s trading at its lowest closing level in almost ten months.
Retail, housing and tobacco stocks are also seeing notable strength, while energy stocks are seeing further downside amid the continued pullback by the price of crude oil.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Tuesday. China’s Shanghai Composite Index plunged by 5 percent and Hong Kong’s Hang Seng Index plummeted by 5.7 percent, although Japan’s Nikkei 225 Index bucked the downtrend and inched up by 0.2 percent.
The major European markets have also moved back to the downside on the day. While the French CAC 40 Index has slumped by 1 percent, the U.K.’s FTSE 100 Index and the German DAX Index are both down by 0.6 percent.
In the bond market, treasuries are regaining ground following the steep drop seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 5.1 basis points at 2.089 percent.
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