Stocks bounced on Monday as investors snapped up beaten-down stocks like banks after eight straight losing weeks for the Dow Jones Industrial Average.
The blue chip index jumped 661 points, or 2.1%. The S&P 500 advanced 1.8%, cutting its losses after falling into bear market territory at one point on Friday, down more than 20% from its record. The Nasdaq Composite rose 1%.
“The market was trying to bounce at the open yet again but this impulse has failed multiple times over the past several weeks,” said Ross Mayfield, investment strategy analyst at Baird. “The bar is higher now for sustained positive performance given all of the well-known headwinds.”
JPMorgan rose 7% after the bank said itsooner than planned thanks to rising rates giving its lending business a boost. Citi and Bank of America got a 6% boost, and Wells Fargo added 5%.
Ross Stores and TJX were also in the top gainers Monday, up 8% and 5%, respectively, coming off a busy few days of earnings for retailers, which arewith Costco, Dollar General, Nordstrom and Macy’s.
Shares of VMWare jumped more than 20% after Bloomberg News and Reuters reported that chipmaker, citing sources. Broadcom shares fell 2%.
Electronic Arts shares rose about 2% following a report that the video game maker is actively seeking a sale or merger.
Sentiment appeared to have gotten a boost after President Joe Biden said he was considering reducing tariffs on some products imported from China. “I am considering it,”. “We did not impose any of those tariffs. They were imposed by the last administration and they’re under consideration.”
The moves cameon an intraday basis. While the benchmark was down 20% at one point, it did not close in a bear market after a late-day comeback.
Investors have been looking for signs of a bottom as the market 2022 sell-off in stocks approaches its sixth month. Oppenheimer’s chief investment strategist, John Stoltzfus, notes that nasty sell-offs aren’t uncommon in times of Federal Reserve tightening, and that the market appears “way over sold” with big declines hitting even stocks with strong cash flow and profitability.
“We remain positive on equities favoring cyclicals over defensives and profitable technology companies whose services and products are deeply embedded in the lives of both business and the consumer,” he said in a note Monday. “We look for the economy and the markets… to ‘work their way out of the woods’ from a period of high anxiety and crisis.”
The S&P 500 currently sits about 18% off its record high, while the Dow is down 14.4%. The Nasdaq is already deep in bear market territory, down 30% from its high.
Last week marked the Dow’s first eight-week losing streak since 1923, while the S&P 500 capped a seven-week losing streak, its worst since 2001.
The Nasdaq saw its seventh negative week in a row for the first time since March 2001. The tech-heavy index also saw its lowest intraday level since November 2020 on Friday.
“Investors are trying to come to grips with what exactly is happening and always try to guess what the outcome is,” said Susan Schmidt of Aviva Investors. Investors and the market hate uncertainty “and this is a period where they don’t have any clear indication on what’s going to happen with this push-pull between inflation and the economy.”
In addition to this week’s retail earnings, investors are looking ahead to Zoom Video, which is set to report results Monday after the close. Nvidia results are also on deck this week.