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Sunday, November 27, 2022

US stocks rise after 7 straight weeks of losses

NEW YORK ( Associated Press) – Shares on Wall Street rallied in afternoon trading on Monday after a seven-week decline that nearly ended the bull market that began in March 2020.

As of 3:12 p.m., the S&P 500 is up 1.8%. The Dow Jones Industrial Average rose 588 points, or 1.9%, to 31,850 and the Nasdaq climbed 1.3%.

Banks made strong profits along with rising bond yields, which they rely on to charge more attractive interest on loans. The yield on the 10-year Treasury rose to 2.86% from 2.77% late Friday. Bank of America rose 6.3%.

Technology stocks also did some heavy lifting. Apple rose 3.4% and Microsoft 2.7%. The area has been choppy over the past few weeks and has prompted a lot of market volatility.

Retailers and some other companies that rely on direct consumer spending lag behind the rest of the market. Amazon fell 0.7%. A series of disappointing earnings reports from major retailers last week sparked concerns that consumers are reducing spending on a wide range of goods as they get squeezed by rising inflation.

Lingering concerns about inflation weighed on the market and kept major indices bearish. The benchmark S&P 500 is experiencing its longest weekly loss since the breakout of the dot-com bubble in 2001. It came close to falling 20% ​​from its peak earlier this year, which would put the index in the heart of most workers. 401(k) accounts in a bear market.

The impact of inflation on consumers and businesses has been a major concern for markets, with the Federal Reserve attempting to mitigate that effect by aggressively raising interest rates. Inflation has been worsened by major supply and demand cuts due to Russia’s invasion of Ukraine and its effect on energy prices. Supply chains were further hurt by China’s recent chain lockdowns for several major cities facing rising COVID-19 cases.

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Investors are concerned that the central bank may go too far or too quickly in raising rates, which could stunt economic growth and potentially lead to a recession. On Wednesday, investors will get a more detailed glimpse into the Fed’s decision-making process with the release of minutes from the latest policymaking meeting.

Wall Street will also get some economic updates from the Commerce Department this week. On Thursday it will release a report on GDP for the first quarter and on Friday it will release data on personal income and spending for April.

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