Wall Street scores first weekly gain since mid-August

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  • Dow up 1.19%, S&P 500 up 1.53%, Nasdaq up 2.11%
  • Focus on US inflation data next week
  • Kroger rides on higher forecast
  • Analysts attribute the rise to an oversold condition

Sept 9 (Reuters) – U.S. stocks rallied on Friday, with major indices posting their first weekly gain in four weeks as investors went on a buying spree, ignoring worries about the economic outlook.

The gains followed a sharp sell-off that began in mid-August, triggered by worries about the impact of tighter monetary policies and signs of an economic slowdown in Europe and China.

Analysts said the market’s rally this week was more related to the previous oversold as uncertainty remained elevated over inflation and the Federal Reserve’s aggressiveness in interest rate hikes.

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“It’s no surprise that we’re getting a bit of a bounce as we come here, because a lot of it is technical,” said Jack Janasiewicz, senior portfolio strategist and portfolio manager at Natixis Investment Managers Solutions.

“I wouldn’t be shocked if we started the week a little stronger and then settled down and gave back a bit as we prepared for the CPI,” he added, looking ahead to next week. .

Investors were waiting for the August consumer price (CPI) report on Tuesday for any sign of slowing inflation. It is expected to show that prices rose at a rate of 8.1% year on year in August, compared to 8.5% in July.

Wells Fargo economists expect headline inflation to register its biggest monthly decline since the peak of the pandemic in April 2020, helped by a pullback in gasoline prices.

All 11 major S&P sectors traded higher on Friday, with communications services (.SPLRCL)Technology (.SPLRCT)energy (.SPNY) and consumer discretionary (.SPLRCD) open the way.

Hammered since the beginning of the year by concerns about rising interest rates, high-growth stocks rose during the week.

Investors are worried about the prospects of another outsized interest rate hike from the Federal Reserve. On Friday, Fed Governor Christopher Waller said the Fed should be aggressive with rate hikes as the economy “can take a punch,” while Kansas City Fed President Esther George said controlling inflation could be a difficult task. Read more

Both remarks come after Fed Chairman Jerome Powell said on Thursday that the US central bank was “strongly committed” to controlling inflation. Read more

Traders are pricing in a 90% chance of a 75 basis point rate hike at the next meeting, up from 57% a week earlier, according to CME Group. Fed watch tool.

The CBOE Volatility Index (.VIX)an indicator of investor anxiety, closed at a two-week low of 22.79 but remained above its long-term average of around 20.

The Dow Jones Industrial Average (.DJI) rose 377.19 points, or 1.19%, to 32,151.71, the S&P 500 (.SPX) gained 61.18 points, or 1.53%, to 4,067.36 and the Nasdaq Composite (.IXIC) added 250.18 points, or 2.11%, to 12,112.31.

Over the week, the Dow advanced 2.7%, the S&P 500 climbed 3.6% and the Nasdaq gained 4.1%.

U.S. equity funds posted outflows of $11.5 billion in the week to Wednesday, their largest outflow in 11 weeks, Bank of America Merrill said Friday.

Volume on U.S. exchanges was 9.91 billion shares, compared to an average of 10.24 billion for the full session over the past 20 trading days.

Kroger Co. (KR.N) jumped 7.4% after the grocer raised its annual forecast.

Tapestry Inc Shares (TPR.N) rose 2.7% after the luxury handbag maker said it expects revenue of $8 billion by fiscal 2025.

Advancing issues outnumbered declining ones on the NYSE by a ratio of 5.14 to 1; on the Nasdaq, a ratio of 2.58 to 1 favored advancers.

The S&P 500 posted seven new 52-week highs and no new lows; the Nasdaq Composite recorded 47 new highs and 63 new lows.

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Reporting by Carolina Mandl, additional reporting by Amruta Khandekar and Ankika Biswas in Bengaluru; Editing by Anil D’Silva, Maju Samuel and Cynthia Osterman

Our standards: The Thomson Reuters Trust Principles.

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