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Dow surges 600 points as markets bounce back


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Wall Street posted healthy gains Thursday as technology and retail stocks bounced back, powering the beaten-down Nasdaq index up 2.7 percent and putting more distance between the S&P 500 and a bear market.

The Dow Jones industrial average surged 516.91 points, or about 1.6 percent, to close at 32,637.19 and chalk up its fifth consecutive day of gains. The broader S&P 500 index climbed 79.11 points, or 2 percent, to settle at 4,057.84. The tech-heavy Nasdaq surged 305.91 points to end at 11,740.65.

Investors have been struggling to shake off the gloomy economic markers — soaring inflation, rising interest rates, the war in Ukraine, the pandemic — that have largely defined 2022. The S&P 500 briefly tipped into bear market territory, defined as a 20 percent fall from the most recent high, in intraday trading last week. As of Wednesday, its 100th trading day of the year, it can now claim the worst start to any year since 1970, according to an analysis by LPL Financial.

But with Thursday’s performance, the broad index has cut its year-to-day losses to 16.5 percent. The rally could signal the start of a more meaningful recovery, said Ryan Detrick, LPL Financial chief market strategist.

“The good news is previous bad starts have seen some nice rubber-band snap backs, and 2022 could be in line to do it once again,” he said.

The stock market gains were led by tech stocks and a handful of retailers. Amazon jumped 4 percent while Facebook’s parent, Meta Platforms, added 4.2 percent.

Macy’s soared 19.4 percent after the department store chain released better-than-expected revenue and earnings in the fiscal first quarter and raised its profit outlook for 2022. Williams-Sonoma and Dollar Tree also posted double-digit gains. Last week, market volatility that had been closely aligned with the tech giants shifted to retailers after major players like Walmart and Target warned that rising fuel and compensation costs were eating into profit.

While investors have cause for celebration this week, the economic environment still stands in sharp contrast with the heady weeks and months of last year, when stock prices shattered record after record, even as pandemic-era disruptions continued to weigh on social and business life.

Economic data released Thursday by the Bureau of Economic Analysis showed that the U.S. economy contracted by 1.5 percent in the first quarter, a slightly larger drop than previously estimated.

Energy prices also climbed, reflecting the continued global impact of the war in Ukraine. West Texas Intermediate crude, the U.S. benchmark, rose 3.4 percent to more than $114 per barrel. Brent crude, the global benchmark, jumped 3.6 percent to well over $117. Meanwhile, fuel prices continue to break records: The U.S. average hit $4.60 a gallon on Thursday, according to AAA.

Meanwhile, investors are worried about rising interest rates. The Federal Reserve has raised its benchmark interest rate twice this year and is expected to do so five more times to ease inflationary pressures. Fed officials have been attempting to pace increases so as not to smother economic growth, a difficult balance to strike. If the economy cools too quickly, it could fall into a recession, generally defined as two consecutive quarters of negative economic growth.

Meanwhile, central bankers have also cautioned that geopolitical events and lingering supply chain constraints are beyond the control of its monetary toolbox.

Thursday’s comeback on Wall Street arrives as investors have watched their portfolios slide all year, eating into their 401(k) retirement accounts. After enjoying the bounty of record profits, fueled by unprecedented government stimulus to save the economy from the worst shocks of the coronavirus pandemic, many shareholders have since fled the market or are bracing for even steeper losses.

European indexes climbed after new fiscal stimulus measures were unveiled in the United Kingdom. The benchmark Stoxx 600 index closed up 0.8 percent, the FTSE 100 added 0.6 percent in Britain. The German DAX popped 1.6 percent, and France’s CAC jumped 1.8 percent.

Asian markets closed mixed Thursday, with the Hang Seng Index dipping 0.3 percent in Hong Kong, the Shanghai Composite index adding 0.5 percent and the Nikkei dipping 0.3 percent in Japan.



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