Pullback By Commodities Prices Sparks Significant Rebound On Wall Street

(RTTNews) – After closing lower for four consecutive sessions, stocks showed a substantial move back to the upside during trading on Wednesday. The major averages all moved sharply higher on the day, with the tech-heavy Nasdaq posting a standout gain.

The major averages pulled back off their highs going into the close but remained firmly positive. The Dow jumped 653.61 points or 2 percent to 33,286.25, the Nasdaq spiked 459.99 points or 3.6 percent to 13,255.55 and the S&P 500 surged 107.18 points or 2.6 percent to 4,277.88.

A pullback by commodities prices contributed to the rebound on Wall Street, as the recent surge in prices had led to worries about even higher inflation.

Crude oil for April delivery plummeted $15 to $108.70 a barrel, while gold for April delivery plunged $55.10 to $1,988.20 an ounce.

The price of crude oil gave back ground as the U.S. has announced a ban on Russian energy imports but European allies declined to follow suit.

The U.K. and European Union have announced plans to reduce their dependence on Russian energy, although the moves are expected to be far less disruptive to global markets.

The markets also benefited from bargain hunting, as traders looked to pick up stocks at reduced levels following the recent weakness.

The tech-heavy Nasdaq ended Tuesday’s trading at its lowest closing level in a year, while the Dow fell to an eleven-month closing low and the S&P 500 dropped to its lowest closing level since last June.

Sector News

Airline stocks extended the rebound seen in the previous session, driving the NYSE Arca Airline Index up by 6.8 percent. The index continued to recover after ending Monday’s trading at its lowest closing level in well over a year.

A continued jump in treasury yields also contributed to substantial strength among financial stocks, with the KBW Bank Index and the NYSE Arca Broker/Dealer Index surging by 4.2 percent and 4.4 percent, respectively.

Chemical stocks also moved sharply higher over the course of the session, resulting in a 4 percent spike by the S&P Chemical Sector Index. The index rebounded after ending the previous session at a one-year closing low.

Semiconductor, housing and biotechnology stocks also saw considerable strength on the day, while energy and gold stocks pulled back along with commodities prices.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. China’s Shanghai Composite Index slumped by 1.1 percent, while Australia’s S&P/ASX 200 Index jumped by 1 percent.

Meanwhile, the major European markets moved sharply higher on the day. While the U.K.’s FTSE 100 Index spiked by 3.3 percent, the French CAC 40 Index and the German DAX Index skyrocketed by 7.1 percent and 7.9 percent, respectively.

In the bond market, treasuries extended the steep drop seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 7.6 basis points to 1.948 percent.

Looking Ahead

Activity in the commodities markets may continue to impact trading on Thursday, while traders are also likely to keep an eye on reports on consumer price inflation and weekly jobless claims.

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