NEW YORK/LONDON: US stocks surged yesterday led by financial and tech shares, rebounding from several down days as oil prices pulled back sharply after fanning inflationary fears and investors gauged developments in the Ukraine crisis.
The S&P 500 posted its biggest one-day percentage gain since June 2020, while the Nasdaq tallied its biggest rise since March 2021.
The Dow Jones Industrial Average rose 653.61 points, or 2%, to 33,286.25, the S&P 500 gained 107.18 points, or 2.57%, to 4,277.88 and the Nasdaq Composite added 460.00 points, or 3.59%, to 13,255.55.
Advancing issues outnumbered declining ones on the NYSE by a 2.75-to-1 ratio; on Nasdaq, a 3.66-to-1 ratio favoured advancers.
About 14 billion shares changed hands in US exchanges, compared with the 13.6 billion daily average over the last 20 sessions.
The heavyweight technology group and financials were the top-gaining S&P 500 sectors, rising 4% and 3.6% respectively.
Energy, which has been the standout sector performer in 2022, fell 3.2% as benchmark Brent crude slid to around US$110 a barrel from over US$130 earlier in the week.
“The market is taking a break, consolidating from this downtrend that has seen a lot of stocks getting really, really hammered, especially on the growth side of the market,” said Anu Gaggar, global investment strategist for Commonwealth Financial Network.
“Today’s rally is based on the decline in oil prices, but we haven’t yet seen the bottom in stock prices nor have we seen the highs in oil prices,“ Peter Cardillo of Spartan Capital Securities said.
In Europe, German shares vaulted almost 8% to lead strong gains across stocks marketsyesterday, as investors picked up beaten-down stocks following a rout sparked by fears about the fallout from the Ukraine crisis.
Italian and French shares jumped around 7% each, while the pan-European Stoxx 600 index rallied 4.7% for its best session in two years. The Euro Stoxx 50 shot up 7.4% to 3,766.02.
The German DAX, which has suffered the most among regional indices due to the companies' exposure to Russian energy supplies, marked its biggest percentage gain since March 2020.
The DAX closed 7.9% higher at 13,847.93, Paris’ CAC 40 surged 7.1% to end at 6,387.83 and London’s FTSE 100 was up 3.3% at 7,190.72 at the close of trading,
CMC Markets analyst Michael Hewson attributed the gains to “comments from the Russian foreign ministry which stated that it would be better if their goals in Ukraine were achieved through talks.”
But OANDA analyst Craig Erlam told AFP the surge in European stocks is likely a “dead cat bounce” – a market term referring to a rebound that briefly interrupts a prolonged downturn.
“We appear to be seeing a temporary corrective move,” Erlam said, predicting the rebound would not last as Russia continues to wage war on Ukraine.
“The invasion is still happening, sanctions are still being imposed and oil prices are still high,“ he noted. “None of that is conducive with a sustainable stock market recovery.” – Reuters, AFP