Wall St The Week Ahead: US markets rebounding

VOLATILITY spiked last week after the tragedy of a downed civilian jetliner in Ukraine and the mounting death toll in Gaza and Israel interrupted the summer trading slumber.

Still, the bears may have to wait a while to call the start of a correction.

Uncertainly took over Wall Street Thursday as investors fled stocks, giving the S&P 500 its first decline of more than one per cent in three months. The VIX posted its biggest one-day percentage increase since April 2013, surging 32 per cent.

Friday’s rebound, however, suggests that the market’s attention to Ukraine and Gaza will be limited unless a wider conflict erupts, with investors instead keeping their focus on earnings.

I guess my explanation would be the (Federal Reserve) has created a bubble,” said Michael O’Rourke, of JonesTrading in Greenwich, Connecticut.

“There’s nothing out there right now indicating the Fed’s going to change anything and that’s why, when we have these dips, there’s always buyers around.”