- Nasdaq, S&P 500 post longest weekly winning streaks since November
- The S&P 500 is recouping 50% of bear market losses
- The S&P 500 is up 17.7% from its mid-June low
NEW YORK, Aug 12 (Portal) – Wall Street closed higher on Friday as signs that inflation may have peaked in July boosted investor confidence that a bull market may be underway and the Spurred the S&P 500 and the Nasdaq to post their fourth straight week of earnings.
The S&P 500 (.SPX) is up 17.7% from a mid-June low, with the latest gains coming on data this week showing a slower-than-expected rise in the CPI and a surprise fall in producer prices over the past month.
The S&P 500 broke above a closely watched technical level of 4,231, suggesting the benchmark index has recouped half of its losses since falling from its all-time high in January. A 50% retracement for some signals a bull market. Continue reading
“It’s really just a number, but it certainly makes investors feel better — at least those who bought near the bottom,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.
“I wouldn’t declare this bear market a winner just yet. There’s probably still some bad news to come. But there is a very good chance that we have bottomed out.”
The Dow Jones Industrial Average (.DJI) was up 424.38 points, or 1.27%, to 33,761.05, while the S&P 500 (.SPX) was up 72.88 points, or 1.73%, to 4,280.15 and the Nasdaq Composite (.IXIC) up 267.27 points. or 2.09% to 13,047.19.
For the week, the S&P 500 was up 3.25%, the Dow was up 2.92% and the Nasdaq was up 3.8%.
Volume on US exchanges was 9.99 billion shares compared to the average of 11.04 billion for the entire session over the past 20 trading days.
While the S&P 500 and Nasdaq posted their longest weekly winning streaks since November, analysts noted that the Federal Reserve still has no work to do as it tries to tame inflation through aggressive rate hikes without triggering a recession.
“Markets certainly got some great inflation news this week,” said Dec Mullarkey, managing director of investment strategy and asset allocation at SLC Management in Boston.
“A win lap was appropriate in some ways, but it’s far from mission accomplished. It’s still going very slowly.”
Raindrops hang from a Wall Street sign in front of the New York Stock Exchange in Manhattan in New York City, New York, U.S. October 26, 2020. Portal/Mike Segar
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Inflation could slow to 7% or a little below by year-end, but getting core inflation below 4%, which is double the Fed’s target, will be more difficult than markets expect, Mullarkey said.
Traders are pricing in a less hawkish Fed, with Fed fund futures showing a 55.5% chance of Fed policymakers raising rates by 50 basis points when they meet in September, rather than 75 basis points. FEDWACH
Wall Street was a sea of green for the second straight day, all 11 major sectors of the S&P 500 rose, along with semiconductors (.SOX), small caps (.RUT) and Dow Transportation (.DJT). Growth stocks (.IGX) are up 2.1%, while value (.IVX) is up 1.4%.
Investors bought $7.1 billion worth of shares in the week ended Wednesday, according to a note from Bank of America, with U.S. growth stocks seeing the largest weekly inflow since December last year. Continue reading
Also optimistic was data showing that US consumer sentiment rose further in August from a record low this summer and US households’ near-term inflation outlook eased again on the back of falling gasoline prices. Continue reading
After a bumpy start to the year, better-than-expected second-quarter earnings from Corporate America bolstered optimistic sentiment for US equities.
Analysts collectively believe the S&P 500 posted 9.7% year-over-year earnings growth for the April-June period, much stronger than the 5.6% forecast for the quarter-end, per Refinitiv.
Banks (.SPXBK) rose 1.4%, extending its rally for the sixth straight week.
GlobalFoundries Inc (GFS.O) rose 11.9% after being included in BofA Global Research’s “US 1 list.”
Rising issues predominated on the NYSE at a 4.43 to 1 ratio; on the Nasdaq, a 2.76 to 1 ratio favored movers.
The S&P 500 posted five new 52-week highs and 29 new lows; the Nasdaq Composite posted 78 new highs and 39 new lows.
Reporting by Herbert Lash in New York Additional reporting by Bansari Mayur Kamdar and Aniruddha Ghosh in Bengaluru; Edited by Arun Koyyur and Matthew Lewis
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