U.S. Stocks Regaining Ground As Traders Go Bargain Hunting
Stocks have moved mostly higher in morning trading on Monday, regaining ground following the weakness seen last week. The Dow and the S&P 500 have shown strong moves to the upside, while the tech-heavy Nasdaq is posting a more modest gain.
In recent trading, the Dow and the S&P 500 have reached new highs for the session. While the Nasdaq is up 34.91 points or 0.3 percent at 14,065.29, the Dow is up 487.29 points or 1.5 percent at 33,777.37 and the S&P 500 is up 42.90 points or 1 percent at 4,209.35.
The rebound on Wall Street partly reflects 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 are moving sharply higher along with the price of crude oil, with crude for July delivery jumping $1.36 to $73 a barrel.
Reflecting the strength in the energy sector, the Philadelphia Oil Service Index is up by 3.7 percent and the NYSE Arca Oil Index is up by 3.2 percent.
Considerable strength is also visible among chemical stocks, as reflected by the 2.2 percent surge by the S&P Chemical Sector Index. The index is bouncing off its lowest closing level in over two months.
Financial, transportation and steel stocks are also seeing notable strength on the day, regaining ground following recent weakness.
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 have moved to the upside on the day. While the German DAX Index has advanced by 0.8 percent, the French CAC 40 Index is up by 0.4 percent and the U.K.’s FTSE 100 Index is up by 0.3 percent.
In the bond market, treasuries are giving 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, is up by 3 basis points at 1.480 percent.
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