Tech, financials lead resurgent Wall St as oil plunges
U.S. stocks surged on Wednesday led by financial and tech shares, rebounding from several down days as oil prices pulled back sharply after fanning inflationary fears and investors gauged developments in the Ukraine crisis.
The S&P 500 posted its biggest one-day percentage gain since June 2020, while the Nasdaq tallied its biggest rise since March 2021.
Global oil prices posted their biggest plunge since the early pandemic days nearly two years ago, after the United Arab Emirates said the OPEC member would support increasing output into a market in disarray because of supply disruptions caused by sanctions imposed on Russia over its conflict with Ukraine.
A steep rise in oil and other commodities has sparked concerns about a further jolt to rising inflation and the potential for slowing economic growth.
“I think it is an oversold rally on cooling in commodities,” said Walter Todd, chief investment officer at Greenwood Capital. “Stocks have been sold pretty aggressively for a few days. I don’t know that it permanently changes the direction of things.”
The Dow Jones Industrial Average .DJI rose 653.61 points, or 2%, to 33,286.25, the S&P 500 .SPX gained 107.18 points, or 2.57%, to 4,277.88 and the Nasdaq Composite .IXIC added 460.00 points, or 3.59%, to 13,255.55.
The heavyweight technology group .SPLRCT and financials .SPSY were the top-gaining S&P 500 sectors, rising 4% and 3.6% respectively.
Energy .SPNY, which has been the standout sector performer in 2022, fell 3.2% as benchmark Brent crude LCOc1 slid to around $110 a barrel from over $130 earlier in the week.
Travel and leisure stocks, which have been hit hard recently, also soared, with shares of Carnival Corp CCL.N rising 8.8% and United Airlines Holdings UAL.O up 8.3%.
“The market is taking a break, consolidating from this downtrend that has seen a lot of stocks getting really, really hammered, especially on the growth side of the market,” said Anu Gaggar, global investment strategist for Commonwealth Financial Network.
In the latest developments, Ukraine accused Russia of bombing a children’s hospital in the besieged port of Mariupol during an agreed ceasefire to enable civilians trapped in the city to escape.
Ukraine’s Foreign Minister Dmytro Kuleba was due to meet Russian foreign minister Sergei Lavrov in Turkey on Thursday.
Stocks have struggled as concerns about the Russia-Ukraine crisis have deepened a sell-off initially fueled by worries over higher bond yields as the Federal Reserve is expected to tighten monetary policy this year to fight inflation.
On Monday, the Nasdaq confirmed it was in a bear markt, falling over 20% from its record high, while the Dow Jones Industrial Average confirmed it was in a correction as it closed more than 10% lower from its record peak.
Investors were awaiting Thursday’s report on U.S. consumer prices as a key data release ahead of the Fed’s March 15-16 meeting.
Advancing issues outnumbered declining ones on the NYSE by a 2.75-to-1 ratio; on Nasdaq, a 3.66-to-1 ratio favored advancers.
The S&P 500 posted two new 52-week highs and three new lows; the Nasdaq Composite recorded 32 new highs and 53 new lows.
About 14 billion shares changed hands in U.S. exchanges, compared with the 13.6 billion daily average over the last 20 sessions.
(Reporting by Lewis Krauskopf in New York, Devik Jain and Sabahatjahan Contractor in Bengaluru; Editing by Saumyadeb Chakrabarty, Sriraj Kalluvila and Lisa Shumaker)