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S&P 500 rises for third straight to finish a wild week of buying and selling

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The S&P 500 and Dow Jones Industrial Average posted gains on Friday, ending a volatile week on Wall Street. A move by China to ban cryptocurrencies weighed on the tech sector, and Nike shares fell as supply chain problems due to the pandemic hit the sneaker giant.

The Dow Jones Industrial Average rose 33.18 points, or 0.10%, to 34,798.00. The S&P 500 rose 0.15% to 4,455.48 and the Nasdaq Composite lost 0.03% to 15,047.70.

“As bad as things started for stocks on Monday, a rebound and midweek calm on Friday isn’t so bad,” said Ryan Detrick, chief market strategist at LPL Financial. “Even so, many of the concerns about Evergrande, a slowing economy, and lingering supply chain issues are still there.”

The Nasdaq underperformed other major averages on a weekly basis, and the tech-heavy index rose 0.02% for the week. The Dow ended the week 0.6% higher while the S&P 500 finished it 0.5% higher.

A tough crackdown on Bitcoin by China hurt market sentiment overnight, particularly in technology stocks that depend on crypto-related revenues. China’s central bank on Friday declared all activities related to cryptocurrencies to be illegal. Overseas crypto exchanges offering services in mainland China are also illegal, the People’s Bank of China said.

Bitcoin lost 5% and ether lost about 7% in response. The crypto exchange Coinbase, which gets most of their revenue from retail, and Robinhood, which got more than half of their transaction-related revenue from crypto last quarter, lost over 2%.

Meanwhile, Nike confirmed the fears of investors, worried about the pandemic, devastating supply chains and increasing costs for businesses, especially multinational corporations. Nike shares fell 6.2% after the sneaker giant lowered its outlook for fiscal 2022 due to an extended production shutdown in Vietnam, labor shortages and long transit times. Nike expects full-year sales to grow in the mid-single-digit range, compared to the previously forecast low double-digit growth.

The company also reported quarterly revenue that fell short of analysts’ expectations due to declining demand in North America due to the flare-up of the Delta variant. Other apparel manufacturers and retailers gave way. PVH Corp fell 1%.

Within the S&P, Nike’s decline was offset by gains on the reopening of stocks. Carnival was up 3% after the quarterly results were announced, while other cruise lines and airlines were up around 2%. Energy was also leading.

It’s been a bad week for the markets. Stocks began a two-day recovery rally on Wednesday after the Federal Reserve signaled that there was no impending lift to its ultra-loose monetary policy. Investors are also betting that Chinese real estate giant Evergrande’s debt crisis will have no impact on global markets.

Investors were waiting to see if Evergrande, the failing developer at the center of the country’s housing crisis, would pay $ 83 million in interest on a US dollar bond due Thursday. The company has been silent so far and has 30 days before it fails technically.

Evergrande worries hit global markets earlier in the week, with the Dow dropping more than 600 points on Monday.

“If Evergrande fails, exposure outside of China seems limited and as the government will do whatever it takes to contain it,” said Edward Moya, senior market analyst at Oanda. “If China is successful, global risk-taking may not be affected as much.”

The dominant theme for the rest of the year will be falling Covid cases worldwide and economic acceleration, said Bill Callahan, investment strategist at Schroders.

“Cyclical stocks from the energy, financial, industrial and travel sectors will again hold their own as market leaders by year-end,” he said, while “global bond yields will drive much higher with longer maturities and global yield curves will steepen as they run investors accept growth investments ”.

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