Wall Street ends its six-day losing streak
WALL Street ended higher for the first time in over a week yesterday, with the Dow and the S&P 500 rising 1 per cent at one point, but many analysts saw the rebound as short-lived.
A report showing record US exports in April eased some concerns about a stalled economic recovery, which had been weighing on the market.
A spike in oil prices helped lift materials and energy stocks. Investors also snapped up beaten-down stocks in the financial sector.
The S&P materials sector index rose 1.6 per cent and the energy index gained 1.2 per cent. The Morgan Stanley cyclical index, which is down more than 5.2 per cent in June, rose 1 per cent. The KBW bank index was up 1.2 per cent.
Several economists said the spike in US exports in April could prompt revisions higher of gross domestic product growth in the second quarter, interrupting a trend of lowered expectations.
But many analysts still expected the S&P to retest its March low of 1,250 after a string of data, including the latest payrolls report, provided little room for optimism.
Concern over the future of equities after the Fed’s $600bn second round of stimulus expires at the end of this month also weighed on the market.
After falling for six straight days, “the market was looking for an excuse to bounce back and it got it” from the trade data, said Steve Blitz, senior economist at ITG in New York.
“You can’t take just one day and draw a conclusion that the bear market is over.”
Reflecting the bearish sentiment, the daily volume put/call ratio for equity options on the Chicago Board Options Exchange (CBOE) was at an 18-month high as of Wednesday’s close, according to data posted on the exchange website, indicating investors are significantly bearish on the stock market.
The Dow Jones industrial average was up 75.42 points, or 0.63 per cent, at 12,124.36. The Standard & Poor’s 500 Index was up 9.44 points, or 0.74 per cent, at 1,289.00. The Nasdaq Composite Index was up 9.49 points, or 0.35 per cent, at 2,684.87.
The S&P had lost more than 6 per cent in the last six days leading up to yesterday, while the Nasdaq had nearly erased its gains for the year.
Texas Instruments shares rose 0.7 percent to $32.91 even after the company cut its earnings and revenue forecasts late on Wednesday.