US Stocks Gain Ground Tuesday 09/27 10:06
Stocks rose in morning trading on Wall Street Tuesday a day after a broad
sell-off sent the Dow Jones Industrial Average into a bear market to join other
major U.S. indexes.
NEW YORK (AP) -- Stocks rose in morning trading on Wall Street Tuesday a day
after a broad sell-off sent the Dow Jones Industrial Average into a bear market
to join other major U.S. indexes.
The S&P 500 rose 1% as of 10:22 a.m. Eastern. The Dow rose 219 points, or
0.8%, to 29,498 and the Nasdaq rose 1.4%.
Energy stocks were among the biggest gainers as U.S. crude oil prices rose
2.8%. Exxon Mobil rose 3.1%. Technology stocks and retailers also helped lead
the gains. Apple rose 1.7% and Home Depot rose 1.8%.
The gains come amid an extended slump for stocks. With just a few days left
in September, stocks are heading for another losing month as markets fear that
the higher interest rates being used to fight inflation could knock the economy
into a recession.
The S&P 500 is down more than 6% in September and has been in a bear market
since June, when it had fallen more than 20% below its all-time high set on
Jan. 4. The Dow's drop on Monday put it in the same company as the benchmark
index and the tech-heavy Nasdaq.
Central banks around the world have been raising interest rates in an effort
to make borrowing more expensive and cool the hottest inflation in decades. The
Federal Reserve has been particularly aggressive and raised its benchmark rate,
which affects many consumer and business loans, again last week. It now sits at
a range of 3% to 3.25%. It was at virtually zero at the start of the year.
The Fed also released a forecast suggesting its benchmark rate could be 4.4%
by the year's end, a full percentage point higher than it envisioned in June.
Wall Street is worried that the Fed will hit the brakes too hard on an
already slowing economy and veer it into a recession. The higher interest rates
have been weighing on stocks, especially pricier technology companies, which
tend to look less attractive to investors as rates rise.
Bond yields were mixed on Tuesday. The yield on the 2-year Treasury, which
tends to follow expectations for Federal Reserve action, fell to 4.28% from
4.34% late Monday. It is trading at its highest level since 2007. The yield on
the 10-year Treasury, which influences mortgage rates, rose to 3.95% from 3.93%.
Fears of a recession have grown as inflation remains stubbornly hot.
Investors will be watching the next round of corporate earnings very closely to
get a better sense of how companies are dealing with inflation. Companies will
begin reporting their latest quarterly results in early October.
Investors are also closely watching the latest economic updates. Consumer
confidence remains strong, despite higher prices on everything from food to
clothing. The latest consumer confidence report for September from The
Conference Board showed that confidence was even stronger than expected by
The government will release its weekly report on unemployment benefits on
Thursday, along with an updated report on second-quarter gross domestic
product. On Friday, the government will release another report on personal
income and spending that will help provide more details on where and how
inflation is hurting consumer spending.