Dow rebounds 250 points as markets attempt to halt September slide

The Dow Jones Industrial Average tried to rebound Wednesday after a string of destructive buying and selling periods this September.

The blue chip index rose about 260 points, or 0.75%. The S&P 500 ticked up 0.5%. The Nasdaq Composite traded up 0.4%.

“Despite concerns about the recent downshift in economic and business cycle momentum, we remain confident that strong growth lies ahead and activity is bound to re-accelerate,” wrote JPMorgan strategist Dubravko Lakos-Bujas, in a observe Wednesday. “We remain positive on the equity outlook, and expect S&P 500 to reach 4,700 by end of this year and surpass 5,000 next year on better than expected earnings.”

Some bullish financial information launched earlier than the bell Wednesday helped stabilize investor sentiment. The NY Fed’s Empire Index, a measure of producing within the area got here in at 34.3 for September, manner forward of the 18 consensus estimate from FactSet and an acceleration from August.

Energy shares, which have been fashionable bets amongst traders banking on an enormous financial restoration, gained as WTI crude rose. The Energy Select Sector SPDR ETF gained about 3%. Exxon added about 3%.

Rising U.S. Treasury yields helped carry financial institution shares, with Citigroup up about 2% and Morgan Stanley about 1% increased. Higher rates of interest usually increase financial institution income.

Microsoft shares gained roughly 1% after asserting a dividend enhance and a large $60 billion share repurchase program.

Casino shares like Las Vegas Sands and Wynn Resorts traded within the purple once more on Wednesday. Those names took an enormous hit Tuesday as the federal government of Macau appears to enhance regulatory scrutiny over casinos and Chinese well being authorities reported a Covid-19 outbreak.

Markets have been in a funk to date this month amid rising investor worries concerning the delta variant derailing the financial restoration, together with hand-wringing over the following motion by the Federal Reserve.

The S&P 500 on Tuesday noticed its worst day since Aug. 20. Tuesday marked the fifth straight day of losses for the Nasdaq. The Dow, S&P 500 and the small-cap Russell 2000 index have been within the purple for six of the final seven days.

September has historically been a down month for the markets, which have seen a median decline of 0.56% within the month since 1945, in accordance to CFRA. And after eight months of straight good points, strategists say a pullback could possibly be imminent.

For September, the Dow is down practically 2% and the S&P 500 is off greater than 1%. The S&P 500 is on monitor to see its price month-to-month efficiency since October 2020.

The S&P 500 has continued to transfer increased all year long, dipping beneath the 50-day shifting common solely as soon as, in accordance to Fundstrat. Mike Wilson, chief funding officer at Morgan Stanley, advised CNBC’s “Fast Money” that could possibly be only the start.

“The midcycle transition always ends with a correction in the index,” he mentioned of the S&P 500. “Maybe it’ll be this week, maybe a month from now. I don’t think we’ll get done with this year, however, with that 50-day moving average holding up throughout the year because that’s the pattern we typically see in this part of the recovery phase.”

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