WALL STREET SHAKES OFF STUMBLE, ENDS HIGHER
Stocks shook off a midday slump and ended higher Thursday, keeping the market on track for its first weekly gain after three weeks of punishing losses.
Trading was wobbly throughout the day as investors remained focused on another round of testimony before Congress by Federal Reserve Chair Jerome Powell. Speaking before a House committee, Powell again stressed that the Fed hopes to rein in the worst inflation in four decades without knocking the economy into a recession, but acknowledged “that path has gotten more and more challenging.”
The S&P 500 ended 1% higher after having been down as much as 0.4%. The Dow Jones Industrial Average rose 0.6% and the Nasdaq gained 1.6%.
Technology and health care stocks drove much of the rally, outweighing losses in energy and financial companies. Bond yields mostly fell. Oil prices also fell.
Trading has been turbulent in recent weeks as investors try to determine whether a recession is looming. The benchmark S&P 500 is currently in a bear market. That means it has dropped more than 20% from its most recent high, which was in January. The index has fallen for 10 of the last 11 weeks.
“The market was poised for a bounce,” said Quincy Krosby, chief equity strategist for LPL Financial. “The catalyst for today’s market has been that oil prices have come down.”
The S&P 500 rose 35.84 points to 3,795.73. The index is up 3.3% so far this week. The Dow gained 194.23 points to 30,677.36. The Nasdaq added 179.11 points to 11,232.19.
Smaller company stocks also gained ground. The Russell 2000 rose 21.40 points, or 1.3%, to 1,711.67.
The Federal Reserve is attempting to temper inflation’s impact with higher interest rates, but Wall Street is worried that it could go too far in slowing economic growth and actually bring on a recession.
Big technology and health care companies did much of the heavy lifting. Microsoft rose 2.3% and Johnson & Johnson rose 2.2%. Energy stocks fell as the price of U.S. crude oil dropped 1.8%. Valero fell 7.6%.
Bond yields fell significantly. The yield on the 10-year Treasury note, which helps set mortgage rates, fell to 3.09% from 3.15% late Wednesday.