U.S. Stocks Regain Ground After Worst Week Since October
After showing a substantial move to the downside last week, stocks showed a significant rebound during trading on Monday. The major averages all climbed firmly into positive territory, with the tech-heavy Nasdaq showing a particularly strong advance.
The Nasdaq soared 332.70 points or 2.6 percent to 13,403.39 and the S&P 500 jumped 59.62 points or 1.6 percent to 3,773.86. The Dow underperformed its broader counterparts but still ended the day up 229.29 points or 0.8 percent at 30,211.91.
The rebound on Wall Street came as traders looked to pick up stocks at somewhat reduced levels after the markets saw their biggest weekly decline since October.
Last week, the Nasdaq sank by 3.5 percent, while the Dow and the S&P 500 both slumped by 3.3 percent. The Dow ended last Friday’s trading at its lowest closing level in well over a month.
Traders continued to keep an eye on heavily-shorted stocks like GameStop (GME) and AMC Entertainment, which have seen considerable volatility amid speculative trading by retail investors.
Share of GameStop plunged by 30.8 percent on the day, while shares of AMC edged up by 0.3 percent after seeing early strength.
The markets largely shrugged off a report from the Institute for Supply Management showing the pace of growth in U.S. manufacturing activity slowed more than expected in January.
The ISM said its manufacturing PMI declined to 58.7 in January from a downwardly revised 60.5 in December.
While a reading above 50 indicates continued growth in the manufacturing sector, economists had expected the index to show a more modest drop to 60.0.
Meanwhile, the Commerce Department released a separate report showing U.S. construction spending increased by slightly more than expected in the month of December.
Semiconductor stocks moved sharply higher over the course of the trading session, driving the Philadelphia Semiconductor Index up by 3.9 percent.
Substantial strength also emerged among brokerage stocks, as reflected by the 3.5 percent spike by the NYSE Arca Broker/Dealer Index.
Gold stocks also saw considerable strength on the day, resulting in a 3.3 percent jump by the NYSE Arca Gold Bugs Index.
The rally by gold stocks came amid an increase by the price of the precious metal, with gold for April delivery climbing $13.60 to $1,863.90 an ounce.
Networking, steel and software stocks also showed significant moves to the upside, moving higher along with most of the other major sectors.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan’s Nikkei 225 Index jumped by 1.6 percent, while Hong Kong’s Hang Seng Index surged up by 2.2 percent.
The major European markets also showed strong moves to the upside on the day. While the German DAX Index spiked by 1.4 percent, the French CAC 40 Index shot up by 1.2 percent and the U.K.’s FTSE 100 Index advanced by 0.9 percent.
In the bond market, treasuries regained ground after moving notably lower over the two previous sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.6 basis points to 1.077 percent.
Reaction to the latest earnings news may drive trading on Tuesday amid a quiet day on the U.S. economic front.
Alibaba (BABA), ConocoPhillips (COP), Exxon Mobil (XOM), Harley-Davidson (HOG), Pfizer (PFE), and UPS (UPS) are among the companies due to report their quarterly results before the start of trading on Tuesday.
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