NEW YORK: U.S. stocks surged on Wednesday led by financial and tech shares, rebounding from several down days as oil prices pulled back sharply after fanning inflationary fears and investors gauged developments in the Ukraine crisis.
The S&P 500 posted its biggest one-day percentage gain since June 2020, while the Nasdaq tallied its biggest rise since March 2021.
Global oil prices posted their biggest plunge since the early pandemic days nearly two years ago, after the United Arab Emirates said the OPEC member would support increasing output into a market in disarray because of supply disruptions caused by sanctions imposed on Russia over its conflict with Ukraine.
A steep rise in oil and other commodities has sparked concerns about a further jolt to rising inflation and the potential for slowing economic growth. Read full storyRead full story
"I think it is an oversold rally on cooling in commodities,” said Walter Todd, chief investment officer at Greenwood Capital. “Stocks have been sold pretty aggressively for a few days. I don’t know that it permanently changes the direction of things.”
The Dow Jones Industrial Average .DJI rose 653.61 points, or 2%, to 33,286.25, the S&P 500 .SPX gained 107.18 points, or 2.57%, to 4,277.88 and the Nasdaq Composite .IXIC added 460.00 points, or 3.59%, to 13,255.55.
The heavyweight technology group .SPLRCT and financials .SPSY were the top-gaining S&P 500 sectors, rising 4% and 3.6% respectively.
Energy .SPNY, which has been the standout sector performer in 2022, fell 3.2% as benchmark Brent crude LCOc1 slid to around $110 a barrel from over $130 earlier in the week.
Travel and leisure stocks, which have been hit hard recently, also soared, with shares of Carnival Corp CCL.N rising 8.8% and United Airlines Holdings UAL.O up 8.3%.
“The market is taking a break, consolidating from this downtrend that has seen a lot of stocks getting really, really hammered, especially on the growth side of the market,” said Anu Gaggar, global investment strategist for Commonwealth Financial Network.
In the latest developments, Ukraine accused Russia of bombing a children's hospital in the besieged port of Mariupol during an agreed ceasefire to enable civilians trapped in the city to escape.
Ukraine's Foreign Minister Dmytro Kuleba was due to meet Russian foreign minister Sergei Lavrov in Turkey on Thursday.
Stocks have struggled as concerns about the Russia-Ukraine crisis have deepened a sell-off initially fueled by worries over higher bond yields as the Federal Reserve is expected to tighten monetary policy this year to fight inflation.
On Monday, the Nasdaq confirmed it was in a bear market, falling over 20% from its record high, while the Dow Jones Industrial Average confirmed it was in a correction as it closed more than 10% lower from its record peak.
Investors were awaiting Thursday's report on U.S. consumer prices as a key data release ahead of the Fed's March 15-16 meeting.
Advancing issues outnumbered declining ones on the NYSE by a 2.75-to-1 ratio; on Nasdaq, a 3.66-to-1 ratio favored advancers.
The S&P 500 posted two new 52-week highs and three new lows; the Nasdaq Composite recorded 32 new highs and 53 new lows.
About 14 billion shares changed hands in U.S. exchanges, compared with the 13.6 billion daily average over the last 20 sessions.- Reuters
Reuters also reported separately:
Global stock markets rallied in Europe and North America on Wednesday after three straight days of selling, and oil prices retreated from the peaks scaled over the last week after the United Arab Emirates pledged to boost its oil supply.
Moscow accused the United States on Wednesday of declaring an economic war on Russia, and said it was considering a response to the U.S. ban on Russian oil and energy imports.
Russia's economy faces the gravest crisis since the 1991 fall of the Soviet Union after Western nations imposed sanctions on Russian companies, banks, individuals and its central banking system, following its Feb. 24 invasion of Ukraine.
But there were signs that the conflict could cool on Wednesday, as Russian Foreign Minister Sergei Lavrov arrived in Turkey for more diplomatic talks with his Ukrainian counterpart Dmytro Kuleba.
The MSCI world equity index .MIWD00000PUS, which tracks shares in 50 countries, was up 2.91% on the day at 3:30 p.m. EST (2030 GMT).
U.S. stocks surged on Wednesday, with the tech-heavy Nasdaq jumping over 3%, rebounding from several days of declines as oil prices pulled back sharply and investors gauged developments in the Ukraine crisis.
The Dow Jones Industrial Average .DJI rose 778.14 points, or 2.38%, to 33,410.78, the S&P 500 .SPX gained 123.57 points, or 2.96%, to 4,294.27 and the Nasdaq Composite .IXIC added 493.33 points, or 3.86%, to 13,288.89.
Europe's STOXX 600 gained 4.68% .STOXX.
In a rocky trading session, the international oil benchmark Brent crude LCOc1 settled 13.16% lower at $111.14. U.S. crude CLc1 closed down 12.13% at $108.70 per barrel, its biggest one-day percentage decline since November 2021. O/R
Oil at one point fell more than 17% after OPEC member UAE said it would support boosting supply into a market in disarray because of supply disruptions and sanctions on Russia. Read full story
Joseph Capurso, head of international economics for the Commonwealth Bank of Australia, noted that though Wednesday's market moves appear large, "equities are still well below, and oil prices are still well above, prewar levels."
"The proximate cause for the big moves are signs Ukraine may accept Russian demands for neutrality in exchange for security guarantees," Capurso said. If the war does de-escalate, he said, investors will refocus their attention on inflation data and central banking moves.
WIDESPREAD ECONOMIC CONSEQUENCES
The Russian invasion and ensuing sanctions have played havoc with global supply chains, sent prices soaring across commodities markets and could slow economic growth worldwide.
European companies are suffering more strain on supply chains caused by the war, with German carmakers Porsche, Volkswagen and BMW all curtailing output because of a lack of supplies. Read full story
The London Metal Exchange halted nickel trading on Tuesday after prices rocketed to over $100,000 a tonne on concern that Russian supplies will be interrupted. The LME said it does not expect to resume trading before Friday. Read full story
A World Bank official said high oil prices prompted by Russia's invasion could cut a full percentage point off the growth of big developing economies such as China, Indonesia, South Africa and Turkey.
Emerging market stocks lost 0.19%.
"War is inflationary and this war in particular is very inflationary... not just in terms of energy, oil and gas, but it's inflationary across the commodities complex," said Dan Scott, chief investment officer at Vontobel.
"Grain prices don't react to central bank policy, and nor do necessarily nickel prices.... Hiking interest rates is not going to have a direct impact."
After a four-session rally, spot gold XAU= fell on Wednesday by 2.4% to $2,003.66 an ounce, as markets became less risk-averse. Read full story
The European Central Bank meets on Thursday, but given the threat of stagflation - when prices soar and growth slows - economists expect rate hikes will be put off until later this year.
The euro rose on reports that European Union countries were discussing joint bond issuance to finance energy and defenee spending. The euro EUR= up 1.61% to $1.1074, while the dollar index =USD fell 1.18%.
German government bond yields rose as investors awaited the ECB meeting. Read full story
The 10-year U.S. Treasury yield was 1.9235% US10YT=RR, as U.S. job openings, a measure of labor demand, fell by 185,000 to 11.263 million in January. Read full story
Elsewhere, bitcoin BTC=BTSP surged 9% to $42,260 after U.S. President Joe Biden signed an executive order requiring government agencies to assess the benefits and risks of creating a central bank digital dollar. Read full story