Stocks showed a strong move back to the upside during trading on Friday, partly offsetting the weakness that was seen last week. The major averages all moved notably higher, with the Dow showing a particularly strong upward move.
The major averages moved roughly sideways going into the close, holding on to significant gains. The Dow spiked 586.89 points or 1.8 percent to 33,876.97, the Nasdaq advanced 111.10 points or 0.8 percent to 14,141.48 and the S&P 500 jumped 58.34 points or 1.4 percent to 4,224.79.
The rebound on Wall Street partly reflected bargain hunting after the steep drop seen last Friday dragged the Dow down to its lowest closing level in well over two months.
The Dow closed lower for five straight sessions and tumbled 3.4 percent last week, marking the worst week for the blue chip index since last October.
Last week’s sell-off came amid concerns about the outlook for monetary policy after the Federal Reserve latest projections called for two interest rates hikes in 2023.
St. Louis Fed President Jim Bullard told CNBC’s “Squawk Box” the first rate hike by the Fed could come as soon as next year.
Looking ahead, Fed Chair Jerome Powell is scheduled to testify before the House Select Subcommittee on the Coronavirus Crisis on Tuesday.
Powell is due to discuss the Fed’s response to the pandemic but could also face questions about the outlook for monetary policy.
Reports on new and existing home sales, durable goods orders and personal income and spending may also attract attention in the coming days.
Energy stocks turned in some of the market’s best performances on the day, moving sharply higher along with the price of crude oil. Crude for July delivery spiked $2.02 to $73.66 a barrel.
Reflecting the strength in the energy sector, the Philadelphia Oil Service Index skyrocketed by 5.5 percent, the NYSE Arca Oil Index soared by 4.6 percent and the NYSE Arca Natural Gas Index surged up by 3.5 percent.
Substantial strength was also visible among banking stocks, as reflected by the 2.9 percent jump by the KBW Bank Index. The index rebounded off a two-month closing low.
Steel stocks also saw significant strength on the day, with the NYSE Arca Steel Index shooting up by 2.6 percent after ending the previous session at its lowest closing level in two months.
Airline, chemical and commercial real estate stocks also showed strong moves to the upside, moving higher along with most of the other major sectors.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday. Japan’s Nikkei 225 Index plummeted by 3.3 percent, while Hong Kong’s Hang Seng Index slumped by 1.1 percent.
Meanwhile, the major European markets moved to the upside on the day. While the German DAX Index jumped by 1 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index climbed by 0.6 percent and 0.5 percent, respectively.
In the bond market, treasuries gave back ground after moving sharply higher over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 3.4 basis points to 1.484 percent.
Powell’s congressional testimony is likely to attract attention on Tuesday along with the National Association of Realtors’ report on existing home sales.
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