Stocks are on the rise as Wall Street sheds volatility

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Updated 20 minutes ago

Stocks closed slightly higher on Wall Street on Wednesday as investors shed a bout of volatility after nearly a week of high volatility. Major indices recovered from initial losses after the market reversal after Sen. Mitch McConnell offered Democrats a short-term debt ceiling extension, easing some of the uncertainty over a possible government shutdown. The S&P 500 rose 0.4% and the Dow Jones Industrial Average gained 03% while the Nasdaq Composite closed up 0.5%. Energy prices retreat after a strong recovery which has helped rekindle inflationary fears among investors.

(asterisk) THIS IS A CURRENT UPDATE (asterisk) AP’s previous story appears below.

Stock indices rose slightly on Wall Street on Wednesday afternoon, gaining a foothold after a choppy trading period earlier in the day.

The S&P 500 was up 0.2% at 2:19 p.m. EST, after falling 1.3% earlier. Gains in tech stocks and companies that rely on consumer spending helped offset losses in health, energy and other sectors. Still, about 57% of the benchmark’s stocks were down, and it rose or fell by more than 1% in each of the past four days.

The Dow Jones Industrial Average rose 50 points, or 0.2%, to 34,365. The blue chip index was down more than 450 points at the start. The tech-rich Nasdaq rose 0.3% after fluctuating between small gains and losses.

Small company stocks, a sign of confidence in economic growth, fell: the Russell 2000 index fell 0.8%.

Tech stocks have oscillated between gains and losses as investors reassess whether stocks have gotten too expensive, especially high-priced tech companies. Cisco Systems fell 1.7%, while Microsoft rose 1.3%.

Market volatility comes as investors question the way forward for the economy, amid rising inflation and the continuing impact of the virus pandemic. Bond yields have remained relatively stable since a sharp rise at the end of last month that signaled fears that high inflation might persist longer than economists and investors initially expected.

The 10-year Treasury yield held steady at 1.53%. It was as low as 1.32% just over two weeks ago. Falling bond yields have weighed on banks, which rely on higher yields to charge more lucrative interest on loans. Citigroup fell 0.6%.

Energy prices retreat after a strong recovery which has contributed to inflation fears. US crude oil fell 2% and natural gas fell 9.7%. The decline weighed on energy companies. Exxon Mobil fell 1.9%.

International markets also sold off, with trade in Japan, South Korea, Germany and France all falling by more than 1%.

Investors are grappling with a long list of uncertainties, and that could mean a more lasting pullback in equities than Wall Street has seen so far this year, said Sameer Samana, senior global markets strategist at Wells Fargo. Investment Institute. Inflation and the timing of the debt ceiling in Washington are two major concerns, he said.

Wall Street is also watching the Federal Reserve closely for any changes in the timing to raise interest rates. Analysts said the central bank could act sooner than expected if high inflation persists.

“The investment case for those looking for further gains, at least this year, was the hope that rates would stay at fairly low levels,” Samana said.

Investors will take a closer look at the performance of companies in the third quarter when companies release their quarterly financial results in the coming weeks. Wall Street expects strong earnings growth of 27% for S&P 500 companies, but will also be listening to comments on how supply chain issues and higher costs are hampering operations.

Companies across a wide range of industries have issued warnings of supply chain issues, shipping delays and higher material costs. Some businesses are increasingly concerned that the problem will extend into the holiday shopping season, which typically begins in late November. Toy companies are rushing to get their products to retailers as they grapple with a severe supply chain crisis that could mean sparse shelves for the crucial holidays.

Homebuilder Hovnanian fell 13.7% after warning investors that supply shortages will hurt its finances. Lighting maker Acuity Brands jumped 11.3% after significantly beating analysts’ fourth-quarter earnings guidance.

On Friday, the Ministry of Labor will release its report on employment scheduled for September. The labor market has been slow to fully recover from the pandemic, and the summer upsurge in COVID-19 cases has further hampered its progress.


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