Stocks closed higher Wednesday as bargain hunters swooped in later a lengthy stretch of losses for the major indexes.
Today’s clear price action came as the 10-year Reserves yield eased back from days gone by’s two-month high, dying down 6.7 basis points at 3.273%. A basis point is one-one hundredth of a percentage point.
And the buying persisted even after Federal Reserve Vice Chair Lael Brainard said in an early day speech that the central bank is “in this for as long as it takes to get inflation down.” The Fed will meet later this month, with the market largely pricing in the probability of a third honest 75 basis-point rate hike.
Nearly all sectors refined higher, with utilities (+3.1%) and consumer bendable stocks (+3.1%) leading the charge. The one outlier was energy, which slumped 1.2% as U.S. crude futures tumbled 5.7% to $81.94 per barrel – their lowest close since Jan. 11, according to Dow Jones Market Data – amid expectations of slowing global fiscal growth. “Oil’s breakdown today is a larger shot across the bow, pointing to further struggles ahead in our opinion,” says Dan Wantrobski, technological strategist and normal boss of investigate at Janney Montgomery Scott. “We believe the commodity can break below $80 from here, targeting the mid-$70s range in the weeks ahead.”
As for the major indexes, the Nasdaq Composite jumped 2.1% to 11,791 – snapping its seven-day losing streak, its longest one since 2016. The S&P 500 Index (+1.8% at 3,979) and the Dow Jones Manufacturing Average (+1.4% at 31,581) also notched impressive gains.
Other news in the stock market today:
- The small-cap Russell 2000 spiked 2.2% to 1,832.
- Gold futures gained 0.7% to end at $1,727.80 an ounce.
- Bitcoin rose as high as $19,183, before backtracking to $19,011.19, up 1% from this time days gone by. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
- Twitter (TWTR) rose 6.6% after a report in The Wall Street Journal said a Delaware judge ruled that Elon Musk is allowed to include whistleblower allegations against the social media company in his countersuit. But, the judge denied Musk’s request to push the trial back to November from its now scheduled date of Oct. 17. Twitter is suing Musk over his attempt to walk away from a $44 billion deal to buy the company, while the Tesla (TSLA) CEO in a countersuit has accused TWTR of misrepresenting key metrics for its affair. “Even if we believe the whistleblower observations do provide Musk some hope in the imminent trial while adding a vaguely greater deal of uncertainty, we reckon it will eventually be moot and take up again to see a high probability that TWTR will be conquering in the courts,” says CFRA Investigate analyst Angelo Zino (Hold). “We still reckon the most likely outcome is a hold of TWTR by Musk, either forced by the courts or a agreement at less than a 15%-20% money off.”
- Coupa Software (COUP) jumped 17.9% after the company, who offers cloud-based affair spend management software, reported return. In its second quarter, COUP saw weekly subscription revenues spike 23% year-over-year to a record $193 million, which helped boost total revenue 18% to $211 million. The firm also said its board of directors ordinary a $100 million stock buyback program. UBS Global Investigate analyst Taylor MicGinnis called the results “solid,” but kept a Neutral (Hold) rating on the stock, citing a “more evenhanded” appraisal at current levels given “limited visibility beyond high-teens growth near term.”
Stay Focused on the Larger Picture
Uncertainty over the degree of the Federal Reserve’s next rate hike will take up again to go markets until the central bank’s next policy meeting, scheduled for Sept. 20-21. That makes tomorrow morning’s speech from Fed Chair Jerome Powell a key event to watch, and one that could potentially spark more explosive nature for stocks.
But sage investors know these small-term ups and downs are merely noise when compared to the larger picture. “In the end, the day-to-day conniving of the market only matter to the extent we allow them to,” says Ross Mayfield, investment approach analyst at Baird. “Explosive nature and sell-offs – in all of their various shapes and sizes – are just a reality to bear for the long-term stock owner.”
Indeed, investors can take benefit of the down days to increasingly boost their core choice worth. Not sure where to start? How about with these sturdy blue-chip stocks or by read-through out some of Wall Street’s best bonus payers. For investors wanting a broader deal with, may we suggest the Kip 25. This list of Kiplinger’s pet low-cost mutual funds boast solid long-term routine records and managers with tenures to match. Check them out.