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Bargain Hunting Contributing To Rebound On Wall Street

wallstreet aug28 10may22 lt

Stocks have moved mostly higher in morning trading on Tuesday, regaining ground after moving sharply lower over the three previous sessions. The major averages have all moved back to the upside, with the tech-heavy Nasdaq leading the advance.

Currently, the major averages are off their highs of the session but still in positive territory. The Nasdaq is up 210.20 points or 1.8 percent at 11,833.45, the S&P 500 is up 43.86 points or 1.1 percent at 4,035.10 and the Dow is up 199.93 points or 0.6 percent at 32,445.63.

The rebound on Wall Street partly reflects bargain hunting, as some traders look to pick up stocks at reduced levels following the recent sell-off.

With the steep drop on Monday, the tech-heavy Nasdaq tumbled to its lowest closing level since November 2020, while the Dow and the S&P 500 also hit one-year closing lows.

Buying interest appears somewhat subdued, however, as traders remain wary about inflation, higher interest rates and the outlook for the global economy.

Traders may also be reluctant to make more significant moves ahead of the release of key inflation data in the coming days.

The Labor Department is due to release its report on consumer price inflation on Wednesday, with the annual rate of price growth expected to slow to 8.1 percent in April from 8.5 percent in March.

The latest snapshot of inflation could impact expectations regarding how aggressively the Federal Reserve plans to raise interest rates.

Energy stocks are seeing significant strength on the day after turning in some of the market's worst performances in the previous session. The rebound by the sector comes even though the price of crude oil is seeing further downside, with crude for June delivery falling $0.45 to $102.64 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 3.5 percent.

Biotechnology stocks have also shown a substantial rebound in morning trading, driving the NYSE Arca Biotechnology Index up by 3.5 percent. The index is bouncing off a two-year closing low.

Semiconductor, computer hardware and airline stocks are also regaining ground following yesterday's broad-based sell-off.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Tuesday, although China's Shanghai Composite Index bucked the downtrend and jumped by 1.1 percent. Japan's Nikkei 225 Index slid by 0.6 percent, while Hong Kong's Hang Seng Index sank by 1.8 percent.

Meanwhile, the major European markets have moved back to the upside following recent weakness. While the German DAX Index has spiked by 2.5 percent, the French CAC 40 Index is up by 1.8 percent and the U.K.'s FTSE 100 Index is up by 1.3 percent.

In the bond market, treasuries are extending the rebound seen over the course of the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 11.6 basis points at 2.963 percent.

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