S&P 500 Extends Its Rebound After Sharp Correction: Markets Wrap
(Bloomberg) -- US stocks climbed for a second day, extending the recovery from a sharp drop that reached 10% last week, as industrial and energy shares rallied on economic data that while missing forecasts was able to quell concern about an imminent recession.
Most Read from Bloomberg
More than 90% of the companies in the S&P 500 rose, overshadowing a slide in most megacaps. An equal-weighted version of the benchmark — one that gives Target Corp. as much clout as Apple Inc. — climbed 1.3%. While the latest economic data did little to alter traders’ bets on the Federal Reserve outlook, mixed retail sales brought some relief that consumer spending is not collapsing. As the chatter around tariffs subsided, equities continued to push away from technically oversold levels.
“Corrections that occur within a bull market, tend to be good buying opportunities,” said David Lefkowitz at UBS Global Wealth Management. “The spike in policy uncertainty hit the market at a time when investor positioning and sentiment were quite elevated. But we think a lot of this has now been cleaned up.”
To Michael Wilson at Morgan Stanley, sentiment/positioning gauges have lightened up considerably and seasonality is set to improve in the second half of March. That could provide support for a short-term rally led by the lower-quality, higher-beta stocks that have sold off the most.
“The more important question is whether such a rally is likely to extend into something more durable and mark the end of the volatility we’ve seen year to date,” said Wilson. “The short answer is, probably not.”
The S&P 500 climbed 0.6%. The Nasdaq 100 rose 0.55%. The Dow Jones Industrial Average added 0.9%. A gauge of the Magnificent Seven megacaps fell 1.1%. The Russell 2000 gained 1.2%.
The yield on 10-year Treasuries declined one basis point to 4.30%. The Bloomberg Dollar Spot Index fell 0.3%.
US retail sales rose by less than forecast in February and the prior month was revised lower. However, the so-called control-group sales — which feed into the government’s calculation of goods spending for gross domestic product — increased 1% last month, reversing the previous drop.
“This morning’s February retail sales report offers evidence of a limited, modest economic slowdown, rather than signaling a gathering recession,” said Jennifer Timmerman at Wells Fargo Investment Institute.
