Stocks bounced higher on Monday, with gains for the Dow Jones Industrial of over 600 points. After posting eight consecutive weeks of losses, the Dow rallied 1.98%, or 618.54 points to close at 31,880.24.
The S&P 500 also closed higher, edging 1.86% to close at 3,973.75. Last week, the benchmark US index fell as much as 20.5% from its recent all-time high to sink into the bear territory before recovering to hover around -18.8%. The S&P 500 is on a seven-week losing streak.
Elsewhere, the Nasdaq Composite saw a 1.59% upside, while all the 11 sectors ended the normal trading session in the green.
Financials, energy and consumer staples added 3.2%, 2.6% and 2.1% respectively. Tech stocks also saw reduced sell-off pressure, with the sector up 2.3% on Monday. However, the consumer discretionary sector only moved +0.64%.
Bounce was ‘due’
As the markets traded higher intraday, with the Dow adding more than 650 points at one time, economist Mohamed A. El Erian observed:
We were overdue a bounce … and this is a good one. Sustaining it will require attracting dip buyers and, more generally, cash on the sideline; and, more importantly, avoiding new news that amplifiies concerns about growth and corporate earnings.
US stocks have started the week on a positive note as market observers point out that a bounce was due. As noted above, this follows weeks of downside pressure amid concerns over the global economy as inflation, higher rates and geopolitical factors continued to dictate sentiment.
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