The stock market rebounded on Wednesday after a massive selloff driven by higher bond yields and a global energy crisis. Investors seemed to be shedding these fears as bond yields edged down.
In the middle of the morning, the
Dow Jones Industrial Average
was up 161 points, or 0.5%, after the index fell 569 points on Tuesday to close at 34,299.
were up 0.6% and 0.8%, respectively, after tumbling 2% and 2.8% on Tuesday.
“Ultimately, the bond market has been a major driver of equity flows this week and if yields continue to fall as they did overnight, then a rebound in major stock indexes is likely,” wrote Tom Essaye, founder of Sevens Report Research.
The general decline in stocks on Tuesday came as bond yields surged, putting particular pressure on stocks of tech companies. High returns make future profits less valuable, hitting high growth companies like technology groups, which are expected to make big profits many years into the future. The tech-rich Nasdaq was expected to outperform the Dow Jones and S&P 500 in a rebound on Wednesday.
Yields began to climb right after the Fed largely confirmed that it will begin cutting or cutting its bond buying program soon. Less money entering the bond market could lower bond prices and increase bond yields.
On Wednesday, the benchmark 10-year US Treasury bond yield was down to 1.5% from 1.54%.
Commodity prices fell after hitting decade highs in recent days, with the Dow Jones Commodity Index falling 0.25%. The international benchmark for oil futures, Brent, fell 01% to less than $ 78 a barrel after surpassing $ 80 earlier this week, with U.S. crude futures also falling. fell below $ 75.
Overseas, Asian stocks followed weakness on Wall Street to decline, with the
down 1.8%. The energy crisis in China and the spillover effects on industrial production weighed heavily on the morale of Asian investors.
In Japan, the massive sale — which saw the
2.1% drop – drowned out news that Fumio Kishida was due to be the country’s next prime minister after winning the PLD leadership vote.
“Only if the new prime minister says there is no reason to reopen the fiscal stimulus taps that Japanese markets will react negatively, as much of the recent rally in Japanese equities rests solely on on that premise, ”said Jeffrey Halley, broker at analyst Oanda. .
In Europe, stocks rebounded, the pan-European market
index 0.5% higher.
In the coming day, investors will be able to digest the index of pending home sales for August and the speech by Fed Chairman Jerome Powell at a European Central Bank forum.
Here are nine actions in motion Wednesday:
Dollar tree (ticker: DLTR) the stock rose 13% after the company said it was increasing its share buyback program by over $ 1 billion to $ 2.5 billion.
Boeing (BA) the share gained 4.1% after Air France-KLM has announced its intention to buy dozens of new planes, either from Boeing, or
Airbus SE. In addition, Alliance Bernstein raised the share to Outperform compared to Market Perform.
Micronic Technology The stock (MU) fell 0.3% after posting profit of $ 2.42 per share, beating estimates of $ 2.33 per share, on sales of $ 8.27 billion, at- above expectations of $ 8.2 billion.
Conagra brands The share (CAG) rose 2.3% after being upgraded to Neutral from Underperform at Credit Suisse.
Lockheed Martin The stock (LMT) fell 1.7% after being demoted to Market Perform from Outperform at Cowen.
China Evergrande (3333.HK) rose 15% in Hong Kong, but remains down 78% year-to-date, following news of the sale of most of its stake in a commercial bank to a state-owned company for $ 1.5 billion. It’s a sign that the heavily indebted real estate developer, whose failure threatens wider fallout, is taking help from the authorities to resolve his financial crisis.
China Chemical Steel (1723.Taiwan) rose 9.9% in Taipei, after joining electronics maker
Hon Hai Precision Industry (2354.Taiwan), also known as Foxconn, to build batteries for electric buses. Foxconn fell 1%.
AstraZeneca (AZN) rose 3.5% in London, after its Alexion division bought the remaining stake in Caelum Biosciences for $ 500 million, extending the pharmaceutical giant’s expansion to treatments for rare diseases.
Write to Jacob Sonenshine at email@example.com